Cocoa prices fell sharply on Friday, with March ICE NY cocoa (CCH26) closing down by $732 (-12.05%) and March ICE London cocoa #7 (CAH26) down by $452 (-10.35%). This decline marks a 6-week low for NY cocoa and a 1-month low for London cocoa. The sell-off was driven by exporters capitalizing on previous gains to secure better prices ahead of the West African cocoa harvest and was compounded by a stronger dollar, which reached a 4-week high.
Despite the price drop, the cocoa market shows signs of underlying support due to tightening global supply. Cumulative data indicates that Ivory Coast farmers shipped 1.073 million metric tons (MMT) of cocoa from October 1 to January 4, down 3.3% year-over-year. Additionally, favorable growing conditions are expected to boost the upcoming cocoa harvest in West Africa, with recent reports indicating that the latest cocoa pod count in the region is 7% above the five-year average.
