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Global Tea Shortage; Cocoa Climbed Highest in a Week

September 8, 2009 at 20:10 by Vladimir Vyun

A global tea shortage may rise 10 percent next year because of droughts in Kenya, Sri Lanka and India, the top exporters, damaging crops and boosting prices. The shortage may increase to 110 million kilograms by May to June next year, up from 100 million kilograms this year. Record tea prices in Kenya and India may rise 15 percent in the next 12 months. Lack of supply may increase costs for tea marketing companies. Drought in India is not the only reason for shortage; another reason is years of neglect because of stagnant prices as some tea estates closed and plantation companies cut investment in replanting old bushes and adding new machines.

Cocoa climbed the highest in a week because a stronger British pound increased the attractiveness of supplies in New York and rallying equities lead to speculation that demand may rebound. The pound, used in cocoa trade in London, jumped to the highest price since Aug. 21 against the dollar. December futures for cocoa delivery climbed $35 (1.2 percent) to $2,971 per ton by 10:03 on ICE Futures U.S. in New York.

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