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On Wednesday, March ICE NY cocoa (CCH26) rose by +49 (+0.90%) while March ICE London cocoa #7 (CAH26) fell by -28 (-0.69%). The fluctuations were influenced by currency movements, with NY cocoa benefiting from a weaker dollar, as the dollar index (DXY00) dropped to a 5-week low, contrasting with London cocoa which faced pressure from a stronger British pound.
Cocoa supplies are projected to rise as favorable weather in West Africa enhances yields. The International Cocoa Organization (ICCO) recently revised its 2024/25 cocoa surplus estimate to 49,000 MT, down from 142,000 MT, while global production is expected to be 4.69 MMT, a decline from a prior estimate of 4.84 MMT. In the Ivory Coast, cocoa shipments from October 1 to November 30 reached 718,451 MT, a decrease of 2.1% from the previous year.
Market dynamics are shifting as weak global demand impacts prices. Q3 Asia cocoa grindings fell by 17% year-on-year to 183,413 MT, and European cocoa grindings dropped by 4.8% year-on-year to 337,353 MT. The National Confectioners Association reported a 21% decline in North American chocolate sales volume over 13 weeks, indicating a bearish outlook for cocoa prices despite supportive factors like lowered production in Nigeria.
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