Cocoa prices saw a significant decline on Friday, with July ICE NY cocoa (CCN26) closing down 4.46% at -187 points and July ICE London cocoa #7 (CAN26) down 2.44% at -76 points, reaching 1.5-week lows. This drop follows a peak earlier in the week, attributed to an improved supply outlook, particularly from the Ivory Coast, which raised its cocoa delivery estimate for the 2025/26 season to 2.2 million metric tons (MMT) from an earlier estimate of 1.8-1.9 MMT.
Consumer chocolate demand remains stable despite high prices, as indicated by strong earnings from major companies like Hershey and Mondelez International. However, North American cocoa grindings saw a decrease of 3.8% year-over-year to 106,087 MT, while European cocoa grindings fell 7.8% year-over-year to 325,895 MT, marking the lowest Q1 grindings in 17 years. In contrast, Asian cocoa grindings rose unexpectedly by 5.2% year-over-year to 223,503 MT.
Concerns persist regarding cocoa production in West Africa due to drought conditions affecting both the Ivory Coast and Ghana. Recent data indicates that cocoa shipments from the Ivory Coast are up 0.6% year-over-year at 1.57 MMT for the current marketing year, while Nigerian cocoa exports declined by 35% year-over-year to 18,052 MT. The International Cocoa Organization also noted an increase in the global cocoa surplus estimate for the 2024/25 season to 75,000 MT, the first surplus in four years.
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