On July 3, 2023, cocoa prices declined with July ICE NY cocoa (CCN25) closing down by 0.83% at -85 and July ICE London cocoa #7 (CAN25) down by 0.32% at -22. This drop in prices is attributed to favorable rainfall forecasts in West Africa, particularly in the Ivory Coast and Ghana, which are the world’s two largest cocoa producers.
Ivory Coast cocoa exports for the current marketing year reached 1.6 million metric tons (MMT), a 6.7% increase from last year but a decline from previous months. Additionally, the American Cocoa Association anticipates a global cocoa deficit of 494,000 MT for 2023/24, marking the largest deficit in over 60 years. This period also sees cocoa inventories in U.S. ports rising to 2.26 million bags, up from a 21-year low earlier this year.
Concerns regarding reduced consumer demand due to high cocoa prices are compounded by tariff uncertainties affecting major chocolate producers like Barry Callebaut AG and Hershey Co., which reported significant drops in Q1 sales. The International Cocoa Organization has projected a global production decrease of 13.1% year-on-year for the 2023/24 season, totaling 4.380 MMT.
