As of May, cocoa prices are facing significant declines, with NY cocoa (CCK26) down $0.98 (-2.93%) and London cocoa #7 (CAK26) down $0.11 (-0.45%). This drop is attributed to a stronger U.S. dollar and anticipated declines in chocolate candy sales, projected to be approximately -5% from last year during the Easter season, according to Bloomberg Intelligence.
Current conditions in West Africa reflect persistent drought, with over half of the Ivory Coast and two-thirds of Ghana affected, as stated by the African Flood and Drought Monitor. Despite a recent surge to a two-week high, cocoa prices remain under pressure due to increased ICE cocoa inventories, which hit an 8.25-month high of 2,365,789 bags.
Furthermore, cocoa shipments from the Ivory Coast have decreased by 0.7% year-over-year to 1.43 million metric tons in the current marketing year. Nigerian cocoa exports were up 17% year-on-year in December, complicating global supply dynamics, while forecasts suggest surpluses in upcoming cocoa seasons.
