On Wednesday, July ICE NY cocoa (CCN25) closed down 263 points (-2.65%) and July ICE London cocoa #7 (CAN25) fell 202 points (-3.14%), marking a significant decline and reaching a 2-1/2 week low. The decrease is attributed to rain forecasts for West Africa, which are expected to improve cocoa crop conditions, thereby exerting downward pressure on prices.
Cocoa inventories monitored by ICE have surged to 2,363,861 bags, a 9-1/4 month high, up from a 21-year low of 1,263,493 bags in January. While exports from the Ivory Coast remain stable, recent data shows a decrease in shipments, with 1.66 million metric tons exported from October to June—an increase of just 6.4% compared to the previous year.
Consumer demand is also a concern, highlighted by a 14% decline in Q1 sales for Hershey Co., which anticipates $15-$20 million in tariff costs, potentially impacting chocolate prices. According to the International Cocoa Organization, the global cocoa deficit has risen to 494,000 metric tons for the 2023/24 season, with a production decline of 13.1% year-on-year.
