COCOA: World Supply

and Demand

THE new year has opened poorly for cocoa producers. The period of price stability is past, and cocoa is now cheaper than at any time in the last five years. Prices started to sag late in December when the final estimate of the 1955/56 crop in the Gold Coast, the largest producer, indicated that production had been maintained, contrary to general belief.

Confidence weakened further when the British West African marketing board on January 6 sold 15,000 tons to a large American manufacturer at about 240 - a cwt.; and unusually early sales of Brazilian cocoa from the temporao crop have strengthened expectations of a good crop in Brazil.

Late this week Accra cocoa could be bought for as little as 222/6 a cwt. for March/May shipment.

A fair amount of business has been done at declining prices, but there is little interest in prompt supplies.

Most buyers are waiting to see a„ what price the big British manufac turers and the marketing board will do business. Consumers’ stocks are high, and the credit squeeze in creases their reluctance to add to stock Yet the outlook is not too dismal.

Lower prices are constructive, lor consumption in Europe and the United States is picking up. The

question is how long it will be before consumption draws level with avail able supplies.

World consumption last year is estimated by Gill and Duffus at 707.000 tons and production at 799.000 tons, leaving an apparent increase in stocks of some 90,000 tons. Hence, even if production were to fall well below that of last season, consumption would still

have to rise substantially befores supplies became tight.— London r Economist, Feb. 4. t A past understanding that the Maui Pomare, during the CoolcJ Islands fruit season, would call att any island having 1,000 cases oft oranges, or 3,000 cases of tomatoes,; is likely to be accepted again dur ing the 1956 season.