On Wednesday, September ICE NY cocoa (CCU25) closed up +107 (+1.28%), while September ICE London cocoa #7 (CAU25) closed down -20 (-0.36%). This mixed performance is attributed to currency fluctuations, with NY cocoa benefiting from a decline in the dollar index and London cocoa pressured by a rally in the British pound.
Key factors impacting cocoa prices include a 6% year-over-year increase in Ivory Coast cocoa exports, totaling 1.76 million metric tons (MMT) from October 1 to August 3, but down from a 35% increase reported in December. Concerns regarding dry weather in West Africa, quality issues with mid-crop cocoa, and projected cocoa production declines in Nigeria (down 11% to 305,000 MMT) are also contributing to price support.
However, weak global chocolate demand is a bearish factor, exemplified by Lindt & Spruengli AG and Barry Callebaut AG lowering sales forecasts due to decreased demand. Additionally, cocoa inventories at U.S. ports have reached an 11-month high of 2,368,141 bags. The International Cocoa Organization expects a global cocoa deficit of 494,000 MT for 2023/24, the largest in over 60 years.
