Trade view /
02 June 2016 at 1:34 GMT
There is a problem in the cocoa plantations in Ghana. They are in severe need of rainfall; all because of the sustained West African dryness
which threatens both quality and production in Ivory Coast too, the International Cocoa Organization (ICCO) has warned.
The ICCO issued a new, gloomy upgrade late on Tuesday that increased by 67,000 tonnes, to 180,000 tonnes, its forecast for the world cocoa production deficit in 2016-17. It said that the revision was a reflection of a generally weaker harvest outlook for all of West Africa, which accounts for in excess of 70% of global output.
The extreme weather conditions are a direct result of the severe Harmattan wind in the West African region
. When combined with the impact of El Niño, the impact has been negative for the 2015-16 harvests, the ICCO said.
In Ivory Coast, the Harmattan hot and dry wind blowing in from the Sahara is said to be one of the most aggressive in over 30 years.
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This is worth a speculative play from the long side.
Management and risk
Parameters: Cocoa July 2016 CCN6 USD/tonne.
Entry: Buy 3035.00 18:25 BST.
Targets: 3044 … 3052 … 3068 … 3085.
Time horizon: Medium-term.
— Edited by Susan McDonald
Non-independent investment research disclaimer applies. Read more