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As of October 18, 2023, cocoa prices have surged, with December ICE NY cocoa increasing by 6.25% to $370 and December ICE London cocoa rising by 8.10% to $340. This marks a two-week high for NY cocoa and a 2.5-week high for London cocoa, driven by supply concerns following the EU’s proposal to enforce deforestation laws sooner than expected, potentially limiting cocoa supply from affected countries.
During the week of October 14, commodity funds increased their net-short positions in London cocoa futures to 13,057, the highest level in over three years. Additionally, cocoa exports from the Ivory Coast fell by 31% year-on-year, with shipments totaling 133,209 MT from October 1 to 19. Meanwhile, Q3 cocoa grindings in Asia and Europe declined significantly, further signaling potential weakness in global demand.
Inventory levels also contribute to market dynamics, as ICE-monitored cocoa inventories in U.S. ports dropped to a 6.25-month low of 1,870,004 bags. The International Cocoa Organization has revised its forecast for a global cocoa deficit to 494,000 MT for the 2023/24 season, underscoring ongoing challenges in the cocoa market.
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