Cocoa prices seen down

Cocoa prices seen down

LONDON (Dow Jones): Cocoa crop year 1999-00 promises to spawn record production, keeping prices at depressed levels, said the Economist Intelligence Unit in its quarterly report on Tuesday.

Ivory Coast and Indonesia are expecting their biggest crops ever and Ghana its largest for 17 years, leading to a surplus of 106,000 tons by September, twice as much as previously forecast, the EIU said.

Apart from a slight recovery in prices when supplies tighten before the mid-crop, "there is little chance of much recovery in prices for the rest of this year," it said.

Cocoa prices will fall 23 percent from an average of 51.7 cents a pound in 1999 to 39.8 cents a pound in 2000 before gaining 13 percent to 45 cents a pound in 2001, according to EIU projections.

Stocks are seen up to 1,275,000 tons by September 2000 and are expected to stay 30 percent above consumption (normally seen as the minimum cushion to protect against production shocks) for around the next two years, it said.