**Cocoa Futures Update – March 2023**
Cocoa prices showed a recovery on March 2, 2023, with May ICE New York cocoa (CCK26) closing up $71 (+2.18%) and May ICE London cocoa #7 (CAK26) closing up $52 (+2.16%). This increase followed earlier declines attributed to an improved supply outlook as West African farmers reported favorable rain conditions, particularly in the Ivory Coast and Ghana.
The ICE cocoa inventories hit a 7.5-month high of 2,307,127 bags on March 1, exacerbating supply concerns. In the 10 days prior to purchases resuming for the mid-year crop, local grinders bought over 400,000 metric tons of Ivorian cocoa, indicating a potential emerging demand. However, Ghana has recently cut cocoa prices paid to farmers by nearly 30%, while the Ivory Coast announced a 57% reduction in farmer payments. cocoa exports from these two nations account for over 50% of global supply.
Deliveries to ports in the Ivory Coast have decreased, with cumulative data showing that farmers shipped 1.37 million metric tons in the current marketing year, down 2.8% from the previous year. The International Cocoa Organization has projected a global cocoa surplus of 75,000 metric tons for the 2024/25 season, marking the first surplus in four years.
