Cocoa prices hit a two-year high as the International Cocoa Organization hiked its estimate for the production deficit last season and underlined concerns over a further shortfall in 2013-14, thanks to weather setbacks.
Cocoa for March, New York's best-traded contract, hit $2,844 a tonne, the highest for a nearest-but-one contract since September 2011.
The rise, which took the contract's gain from a late-June low above 30%, came as the ICCO raised to 160,000 tonnes, from 52,000 tonnes, its estimate of the world cocoa production deficit in the 2012-13 season, which ended at the close of September.
"World production of cocoa beans is now expected to be significantly lower than previously envisaged," the ICCO said, cutting its forecast for world output by 55,000 tonnes to 3.99m tonnes.
Meanwhile, the estimate for world consumption was raised by 54,000 tonnes to 4.05m tonnes, a reflection of "robust processing activities" in North America, Western Europe and Asia in the July-to-September period.
'Trees and farmers are ageing'
Furthermore, the organisation highlighted fears of a second successive output shortfall in 2013-14, following dryness in Ivory Coast and Ghana, the top producing countries, and wet weather in third-ranked Indonesia.
"There is growing concern for the return of yet another supply deficit, with dry weather in West Africa negatively affecting the end of the main crop production in the region," the ICCO said.
In Ivory Coast, the "outlook for the next season is rather subdued, as both trees and farmers are ageing.
"In addition to the poor weather conditions, reinvestment is on the low side and the infrastructure is still inappropriate, but improving."
The intergovernmental group added that in Indonesia, "wet weather patterns are being seen as crop-damaging".
'Surge in demand'
The decreased estimate for 2012-13 output reflected largely a cut to hopes for West Africa, with the Ghana crop downgraded by more than 14,000 tonnes to 835,410 tonnes, and the Ivory Coast harvest by 35,000 tonnes to 1.48m tonnes.
Estimates for crops in Indonesia and Nigeria were cut too, with the downgrades more than offsetting increased ideas of the Ecuador harvest.
Meanwhile, ideas of the cocoa grind were raised for a number of geographies, including Ivory Coast, the European Union and the US.
The ICCO flagged a "surge in demand during the third quarter of the year for cocoa butter in the mature markets of Europe and North America, the biggest consumers".
"The cocoa butter ratio, which has been gradually climbing over the months, was a clear indication of how profitable margins were for processors."
This ratio compares the price of cocoa butter with that of raw cocoa beans.