Cocoa futures traded near a 12-year high on worries about West African output.

Prices are up more than 40% year-to-date and are expected to keep rising, supported by concerns that global supplies will remain strained amid adverse weather conditions. Heavy rain in West Africa already has knocked young pods from trees and facilitated the spread of black pod disease, which thrives in humid conditions.

Uncertainty also remains over the El Nino weather phenomenon, with analysts at StoneX anticipating that impacts will persist into early next year.

“The long-term uptrend in the cocoa market remains in place, as low production out of West Africa is expected to keep supplies tight,” ADM Investor Services wrote in a note on Monday.

Ivory Coast, the world’s top cocoa producer, is in the midst of negotiations over new environmental rules for European exports, and Ghana has hiked farm-gate prices in an effort to fend off smuggling. Still, there has been recent optimism that good weather could support a better harvest in Ivory Coast and some areas of Nigeria.

Eoin Treacy's view

Veteran commodities traders may remember there was an effort by chocolate makers several years ago to boost cocoa supply by providing funding for farm modernization and several invested in additional processing facilities. That fed growing demand but appears to have done little to improve supply.