Cocoa Update: Upside Risks To 2010 Price Forecast

Core View: We continue to expect cocoa prices to average GBP1,950/tonne in 2010 and GBP1,800/tonne in 2011, although we identify significant upside risks to these forecasts. Following three consecutive years of global deficit, persistent market tightness should support cocoa prices at the front-end of the curve. Looking further ahead, we expect Cote d'Ivoire to lead a strong rebound in global cocoa production, which should help to stem prices' multi-month rally.

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