**Cocoa Prices Decline Following Inventory Surge and Dollar Strength**
On May 24, 2023, July ICE NY cocoa prices fell by $29 (0.70%) to close at a lower rate, following a recovery of the dollar index, which prompted long liquidation in cocoa futures. Additionally, cocoa inventories rose to a 1.75-year high of 2,745,277 bags, further pressuring prices.
Despite recent highs due to adverse weather conditions affecting supply, concerns about a potential El Niño and increased estimates for cocoa deliveries from the Ivory Coast negatively impacted market sentiment. The Ivory Coast, which produces over half of the world’s cocoa, increased its delivery estimate for 2025/26 to 2.2 million metric tons (MMT), up from a prior projection of 1.8-1.9 MMT. In contrast, cocoa output from Nigeria, the fifth-largest producer, decreased by 35% year-over-year in March, presenting a mixed supply outlook for the global market.
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