March ICE NY cocoa (CCH26) has dropped by 40 points (-0.67%), while March ICE London cocoa #7 (CAH26) is down 26 points (-0.60%) as of today. This decline follows reports of favorable weather in West Africa, which is expected to boost cocoa yields. Farmers in the Ivory Coast have reported beneficial rain and sunshine contributing to healthy cocoa bean development.
Recent data shows that cocoa pod counts in West Africa are 7% above the five-year average, with the Ivory Coast’s harvest beginning optimistically. Additionally, shipping data indicates that farmers have exported 895,544 MT of cocoa from October 1 to December 14, a slight year-on-year increase of 0.2%. However, shrinking ICE cocoa inventories fell to a 9-month low of 1,643,161 bags, reflecting a complex market balance.
On the demand side, weak figures from Hershey indicate disappointing chocolate sales during the Halloween season, which typically represents nearly 18% of annual US candy sales. Furthermore, cocoa grindings in Asia and Europe have seen significant year-on-year declines, contributing to a bearish outlook for prices. Despite this, the International Cocoa Organization has revised its global cocoa surplus projection for 2024/25 to 49,000 MT, marking the first surplus in four years.
