Cocoa prices set a fresh two-year high as the International Cocoa Organization underlined the strong expectations for a forthcoming round of data on consumption of the bean, flagging forecasts of "significant increase in demand".
Cocoa futures for December hit £1,765 a tonne in London, the highest for a spot contract since December, while reaching $2,710 a tonne in New York, the strongest for more than a year.
The gains follow a forecast from the ICCO that the world faces a cocoa production deficit for five successive seasons, including the newly-finished 2012-13, at a time when the revival in Western economies is boosting demand.
Indeed, "most" analysts believe that the forthcoming round of quarterly data on cocoa grindings "will reveal an increase in activity", the ICCO said in a report on Tuesday.
There is market talk that European grinding data on Thursday will also show upward revisions to some historic data.
The "anticipated recovery" in demand from levels depressed by economic slowdown in many developed nations had also been reflected in a jump in prices of cocoa butter, one of the main products of cocoa processing, to more than $7,000 per tonne – up more than 80% year on year, the briefing said.
Cocoa butter is the key ingredient of chocolate bars, largely consumed in the West, as opposed to the powder used in biscuits and drinks, to which Asian consumption has historically been weighted.
"There are wide expectations of a significant increase in demand," an ICCO spokesman told Agrimoney.com.
In fact, some analysts use cocoa demand as a leading indicator of broader economic activity because of its sensitive to consumer spending patterns.
UBS analyst John Clemmow two months ago, saying that "now think it's time to look at plays around the European recovery", highlighted the signals from the last round of quarterly consumer grind statistics.
"Over the years I have found that cocoa grind data is one of the best lead indicators I have ever found for general consumer spending patterns," he said.
"Chocolate consumption falling in a developed market is a clear sign of severe consumer distress as it is one of the last luxuries that gets cut from a household budget.
"Equally, it is one of the first to rebound back as consumer spending recovers."
Supply vs demand
The ICCO spokesman declined to expand on the forecast on Monday from the organisation's director, Jean-Marc Anga, that the world is in for a further fourth successive output deficits, although he restated a forecast for a shortfall of 69,000 tonnes in 2013-14.
At Macquarie, analyst Kona Haque, contrasted the "very solid demand outlook" in the cocoa market with questionable production prospects.
"About 75% of production still comes from high risk areas, in terms of threats from weather or disease," Ms Haque told Agrimoney.com.
"In Ivory Coast, Indonesia, Ghana, you are still not seeing mega-yield growth."