On Wednesday, May ICE NY cocoa (CCK26) closed down 0.52% at -18, while May ICE London cocoa #7 (CAK26) rose 0.16% by +4. This follows a significant rally the previous day, with NY cocoa increasing by 4.80% and London cocoa by 5.12%, driven by reports of local grinders purchasing over 400,000 metric tons of Ivory Coast cocoa export contracts within ten days of resuming purchases.
In the larger market context, Ghana and Ivory Coast, producing over half of the world’s cocoa, have made recent cuts to farmer pay by 30% and 57%, respectively, which has led to new demand emerging due to lower prices. However, cumulative cocoa shipments from the Ivory Coast fell 3.6% year-on-year, totaling 1.35 million metric tons for the current marketing year. Additionally, ICE cocoa inventories have risen to 7-month highs at 2,228,827 bags, while the International Cocoa Organization raised its 2024/25 global cocoa surplus estimate to 75,000 metric tons, the first surplus in four years.
Consumer demand has weakened, with Barry Callebaut AG reporting a 22% decline in cocoa division sales volume for the last quarter, and European cocoa grindings falling 8.3% year-on-year. Conversely, Nigeria’s cocoa exports rose by 17% year-on-year, although production is expected to decrease by 11% in the upcoming year.
