Cocoa Prices Jump After Brexit Vote
Cocoa futures traded in London climbed to the highest level since 1977, boosted by a drop in the pound since the U.K. voted to leave the European Union, according to Bloomberg on Monday (11/7).
Since chocolate makers pay in euros or U.S. dollars, prices in both currencies have declined since the June 23 Brexit referendum.
“Cocoa is not more expensive, it’s a little bit cheaper than before the Brexit,” said Laurent Pipitone, economics and statistics director at the London-based International Cocoa Organization in a phone interview.
Futures for September delivery reached 2,520 pounds, or $3.24 a ton, on Friday on the ICE Futures Europe exchange, according to data compiled by Bloomberg. While prices in pounds have rallied 10 percent since the Brexit vote, they’ve dropped 1.1 percent in euros and 3.9 percent in dollars.
Cocoa is headed for a fifth straight annual gain, the longest run since at least 1989. Prices have climbed after dry weather in West Africa hurt one of two annual harvests, leading traders including Cargill Inc., Olam International Ltd. and Sucres et Denrees SA to predict a production shortfall.
Source Bisnis Indonesia