As of today, May ICE NY cocoa prices have risen by 4.47% to $3,446 per ton, while May ICE London cocoa #7 increased by 4.88% to $2,475 per ton. This rise follows a 1.5-week short-covering rally fueled by concerns over the ongoing conflict in Iran impacting the Strait of Hormuz, which may increase shipping costs and restrict cocoa exports.
Cumulative data from the Ivory Coast reports a 3.6% decrease in cocoa shipments, down to 1.35 million metric tons (MMT) for the current marketing year compared to 1.40 MMT during the same period last year. Additionally, global cocoa production is projected to rise 8.4% year-on-year to 4.7 MMT for 2024/25, despite supply chain challenges and reduced farmer pay in Ivory Coast and Ghana, which produce over half of the world’s cocoa.
Weak demand is also influencing the market; Barry Callebaut AG reported a 22% drop in sales volume within its cocoa division, while Q4 European cocoa grindings fell 8.3% year-on-year to 304,470 MT, the lowest in 12 years. This comes amid increased cocoa exports from Nigeria, which recorded a 17% rise in exports, alongside forecasts suggesting a potential reduction in cocoa production from key producers in the coming years.
