Cocoa's rally may be poised for a setback, analysts have warned, amid fears that the rise in prices to their highest since 1985 represents a price "bubble".

Concerns of a weak crop from Ivory Coast, the world's biggest producer, appear "unrealistic", given the strong start to harvest season, a City analyst told Agrimoney.com.

"It's possible that production may fall as investors appear to want, but it's by no means certain," the analyst said.

"It looks like rather backward logic – trying to manipulate the facts to suit the desire."

Production question 

It was difficult yet to hang a bullish case on a set of soft data, in the week to December 6, when deliveries from plantations to Ivory Coast ports dipped 19% week on week, Commerzbank said.

Despite the drop, deliveries had, at 430,000 tonnes, matched one third of last year's output of 1,22m tonnes in nine weeks.

"Chances are good that the cocoa output in Ivory Coast will surprise on the upside," the bank said, attributing price rises to buying by speculators.

"While, because of this, a short-term price increase to US$3,500-3,600 a tonne cannot be ruled out, we expect a price decline to US$3,000 a tonne in the medium-to-long term, resulting from improved prospects on the supply side."

'Questionable' concerns 

At Sucden Financial, Stephanie Garner said that technical factors, rather than supply and demand fundamentals, were encouraging buying.

"Whether the [supply] concerns are sufficient in reality to warrant cocoa prices breaking highs set almost two and a half decades ago is questionable," she said noting, however, that from a technical perspective the bull run in both London and New York continued "strong and unbreakable".

"With such long positions being held by the funds in both markets, the upside almost now seems to be a self-fulfilling prophecy.

"Another commodities bubble [is] being built up with the biggest concern being as to when it will burst."