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On December 6, 2023, cocoa prices surged, with March ICE NY cocoa (CCH26) closing up by 5.76% to $339 and March ICE London cocoa #7 (CAH26) up 5.62% to $239, reaching one-month highs. This rally follows a tightening global supply outlook, with the International Cocoa Organization (ICCO) significantly lowering its 2024/25 cocoa surplus estimate from 142,000 MT to 49,000 MT, and production estimates from 4.84 MMT to 4.69 MMT.
Furthermore, cocoa inventories monitored by ICE in US ports fell to a low of 1,664,563 bags, marking an 8.75-month low. In the Ivory Coast, cocoa exports for the current marketing year are down 1.8% year-on-year, totaling 804,288 MT between October 1 and December 7, 2023. The country remains the world’s largest cocoa producer.
Looking ahead, favorable weather conditions in West Africa are expected to enhance crop yields, while recent trade developments and lower Nigerian cocoa production are providing additional support to cocoa prices. The inclusion of NY cocoa futures in the Bloomberg Commodity Index in January 2024 may attract as much as $2 billion in new investments.
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