On July 7, 2023, cocoa prices plummeted, with July ICE NY cocoa closing down 12.61% at a two-month low, and July ICE London cocoa down 2.51% at a two-and-a-half-month low. The decline is attributed to favorable rain forecasts for West Africa, where moderate to heavy rainfall is expected to benefit cocoa crops.
Cocoa inventories monitored by ICE in U.S. ports have rebounded from a 21-year low of 1,263,493 bags in January to a 9.25-month high of 2,363,861 bags as of July 5, 2023. Although exports from the Ivory Coast increased by 6.4% to 1.66 million metric tons compared to the previous year, the shipping pace has slowed, raising concerns about future cocoa supplies.
Concerns over the quality of the Ivory Coast’s mid-crop cocoa—estimated at 400,000 metric tons, down 9% from last year—along with a significant cocoa deficit projected at 494,000 metric tons, further signify challenges ahead. Recent data showed North American and European cocoa grindings fell by 2.5% and 3.7%, respectively, in Q1 2023, reflecting weaker demand in the market.
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