**Cocoa Prices Surge Amid Supply Concerns**
On Monday, May ICE NY cocoa (CCK26) closed up $133 (+4.61%), and May ICE London cocoa #7 (CAK26) rose by $60 (+2.92%), recovering from early losses driven by shipping cost concerns. The conflict in Iran has disrupted shipping through the Strait of Hormuz, increasing global shipping rates and import costs for cocoa. Additionally, cocoa deliveries from the Ivory Coast have decreased, with shipments reported at 1.34 million metric tons (MMT) for the current marketing year, down 3.6% from the same period last year.
Market data indicates that cocoa prices are facing pressure from robust global supplies and low demand, as evidenced by recent forecasts from the International Cocoa Organization (ICCO) predicting a 2024/25 global cocoa surplus of 75,000 MT. Furthermore, weak grinding figures from key regions, including an 8.3% decline in Q4 European cocoa grindings, further underscore demand concerns. Notably, Ghana has cut farm-gate prices by nearly 30% for the upcoming growing season, compounding the challenges for the cocoa market, which is heavily influenced by the Ivory Coast and Ghana, responsible for over half of the world’s cocoa production.
