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On December 1, 2023, December ICE NY cocoa closed down by 1.43% (-$108) while December ICE London cocoa fell by 1.73% (-$90). This decline followed a stronger U.S. dollar, prompting long liquidation in cocoa futures. Prices peaked at one-week highs the prior day due to weather concerns in West Africa, with heavy rains in the Ivory Coast affecting farmer access and reduced cocoa movement to ports.
Additionally, cocoa inventories monitored by ICE have hit a 4.25-month low of 2,092,823 bags, contributing to price support. However, expectations of growing supplies and lower demand have pressured prices, as evidenced by a reported 7.2% year-on-year decline in Q2 European cocoa grindings to 331,762 MT. The International Cocoa Organization has also forecasted a 2023/24 global cocoa production decline of 13.1% year-on-year to 4.38 million metric tons, indicating a global cocoa deficit of 494,000 MT, the largest in over 60 years.
Despite some negative trends, forecasts indicate a potential surplus of 142,000 MT in 2024/25, with production expected to rise by 7.8% year-on-year. The Ghana Cocoa Board estimates an increase of 8.3% in Ghana’s cocoa crop to 650,000 MT for the 2025/26 season, which could also influence market dynamics.
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