Palm | Kelapa Sawit

Commodity Prices - Cocoa market news june 18 2011; Cocoa prices are consolidating well below March's 32-year high. Bearish factors include (1) ICO's prediction that 2010/11 global cocoa production will climb 10.9% to 4.025 MMT and the hike in its 2010/11 global cocoa surplus estimate to 187,000 MT, up 68,000 MT from its Feb estimate and (2) the prediction from Ghana, the second-biggest cocoa producer, for a record 2010-11 cocoa harvest of 930,000 MT.

Bullish factors include (1) supply concerns as cocoa deliveries to Ivory Coast ports in the week ended Jun 5 fell -48% from a year earlier to 12,152 MT, (2) the +3.5% y/y increase in Q1 European cocoa grindings, the first gain in 2 quarters, and (3) ICO's hike in its 2010-11 global grindings estimate to a record 3.798 MMT.

Fundamental Outlook-Bull Market Correction-Cocoa prices are correcting lower from their 32-yr high. Longer-term fundamentals remain supportive with ICO's hike in its deficit estimate for the 2009/10 (Oct-Sep) marketing year to 89,000 MT. World cocoa output is 3.630 MMT in 2009/10 and ICO predicts a 10.9% increase to 4.025 MMT for 2010/11. Demand in 2010/11 is forecast up 3.1%, although higher output will lead to a +11.5% gain in ending stocks to 1.816 MMT. The stocks/consumption ratio is forecast at 47.8% vs the yr-earlier 44.2%. @ commodity prices