As of today, September ICE NY cocoa (CCU25) is down 44 points (-0.49%) and July ICE London cocoa #7 (CAN25) is down 45 points (-0.72%), following a recent rebound in the dollar that prompted long liquidation in cocoa futures.
Cocoa prices initially rose to 1-1/2 week highs due to a reduced production forecast from Ghana’s Cocoa Board, which lowered its 2024/25 estimate from 617,500 MT to 600,000 MT. Despite this, recent heavy rain in West Africa is expected to benefit local crops, affecting market prices. ICE-monitored cocoa inventories in US ports have also increased to a 9-1/2 month high of 2,363,861 bags, which contributes to bearish sentiments, despite signs of diminished cocoa exports from Nigeria.
The International Cocoa Organization has recently revised its outlook, projecting a 2023/24 global cocoa deficit of 494,000 MT, signaling the largest gap in over 60 years. Looking ahead, a potential surplus of 142,000 MT is projected for 2024/25, with global cocoa production expected to increase by 7.8% year-on-year to 4.84 MMT.
