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Commodity and Currency


Commodity and Currency Article


The cocoa market hit a new high in the latter half of January, but then a correction occurred through into February. The market crept up until about a week ago when a serious downward move occurred and this is continuing, albeit very slowly. So today the market is at a 3 month low last seen in December. This correction has been largely caused by the market speculators withdrawing as the currency markets have been a lot more volatile giving them a better profit opportunity.

With the Main Crop pretty well over, arrivals in the key Cocoa growing areas in West Africa are up against last year although with political unrest causing civil unrest in the Ivory Coast prior to the election which, like ours, seems due around end April early May.

Unfortunately the overall market level now and over the past 6 months means that chocolate prices will be firmer in the second half of 2010. Also Cocoa Butter ratios are firming up as the surplus stock is eaten away, and this will also push Milk & White prices higher.



Sterling strengthened nicely during January, however this was short lived as speculation about the outcome of the General Election worried about Opinion Polls indicating a hung parliament. There is a long way to go and the £ is in for a rocky ride. Against the US$, Sterling weakened to below $1.50 = £1. It was not long ago that £1 could buy you over US$2 heady days!!  

Tony Mycock
4th March 2010

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