Cocoa prices surged on June 12, 2023, with July ICE NY cocoa (CCN26) rising by $107 (+2.83%) and July ICE London cocoa #7 (CAN26) up $68 (+2.35%). This increase coincided with a weakening dollar, as the dollar index ($DXY) hit a one-week low, providing a supportive environment for commodity prices.
Key data from the Ivory Coast indicated that cocoa shipments reached 1.95 million metric tons (MMT) this marketing year, up 18.9% compared to the previous year. However, production is expected to decline by 10.8% year-on-year to 1.65 MMT in 2025/26. Additionally, ICE cocoa inventories reached a 1.75-year high of 2.917 million bags, just slightly below the level reported a week prior.
The outlook for cocoa is complicated by potential weather impacts from an El Niño pattern, with NOAA estimating a 67% chance of a “Super El Niño” this year. This could adversely affect cocoa production in West Africa, amid declining global demand as reported by various associations, including a 3.8% drop in North American cocoa grindings and a 7.8% drop in European grindings.
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