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On September 24, 2023, cocoa prices fell significantly, with September ICE NY cocoa down 3.43% to $8,294 and September ICE London cocoa down 3.41% to $5,592. The drop follows two consecutive days of declines after reaching a two-month high on concerns over dry weather in West Africa, which is critical for cocoa growth.
Cocoa inventories in U.S. ports decreased to 2,248,546 bags, the lowest in two months. Concerns about the quality of the mid-crop cocoa in the Ivory Coast have also contributed to price support, with reports indicating that up to 6% of truckloads contain poor-quality beans, a marked increase from 1% during the main crop. Additionally, Nigeria is projected to see an 11% drop in cocoa production for the 2025/25 crop year, further tightening supply.
However, weakening chocolate demand is a bearish factor, with Lindt lowering its margin guidance due to a decline in sales and Barry Callebaut also reducing its sales estimates. European cocoa grindings for Q2 fell by 7.2% year-over-year, signaling dampened demand across major markets.
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