Adverse climate pushes Cocoa prices to 7-week high

Cocoa prices continued their 7-week rally, reaching new contract highs for March NY cocoa and March London cocoa. The surge in cocoa prices is due to a worsening outlook for the West African cocoa mid-crop.

Maxar Technologies cautions that dry conditions in West Africa will impact the early development of the mid-year cocoa crop harvested in April, with the potential for further exacerbation by the arrival of the seasonal Harmattan winds.

The decrease in global cocoa stockpiles is also driving prices higher. Cocoa inventories monitored by ICE in US ports have been declining for the past 1-1/2 years and reached a 20-year low on Monday at 1,417,061 bags.

The International Cocoa Association (ICCO) increased its 2023/24 global cocoa deficit estimate to -478,000 MT on November 22, up from May’s -462,000 MT. This is the largest deficit in over 60 years and supported the recent rise in cocoa prices.

Attribution: Nasdaq

Subediting: M. S. Salama