Cocoa prices surged on September 1, 2023, with September ICE NY cocoa (CCU26) closing up 3.19% (+171) and September ICE London cocoa #7 (CAU26) up 2.97% (+118). This increase followed unexpectedly strong North American Q2 cocoa grindings, which rose 7.7% year-on-year to 109,659 metric tons, significantly surpassing expectations for a decline.
Conversely, Q2 European cocoa grindings fell 4.6% to 316,366 metric tons, marking the lowest level for the period in six years. In contrast, Q2 Asian cocoa grindings increased by 25% year-on-year to 224,646 metric tons, outperforming expectations. Additionally, Nigerian cocoa exports rose 30% year-on-year to 18,922 metric tons, contributing to concerns over global supply levels.
Despite indications of higher global cocoa supplies and rising inventories, which reached a two-year high of 3,249,974 bags, signs of production challenges emerged, particularly from the Ivory Coast, where early assessments predict an 18% drop in the upcoming harvest to 1.8 million metric tons. The ongoing El Niño weather pattern could further stress cocoa yields in West Africa.
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