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On September 22, cocoa prices surged, with September ICE NY cocoa (CCU25) closing up 2.52% (+205) and September ICE London cocoa #7 (CAU25) up 2.66% (+142). Concerns over dry weather in West Africa, particularly in Ivory Coast and Ghana, have driven prices higher as rainfall is below the 30-year average, jeopardizing cocoa pod development ahead of the main crop harvest starting in October.
Ivory Coast cocoa exports showed a year-to-date increase of 6.1% at 1.74 million metric tons (MMT) as of July 20. Notably, ICE Futures Europe reported a significant increase in net-short positions by commodity funds, totaling 8,265 short positions, the highest in over two years. Weak global demand is also impacting the market, with European cocoa grindings down 7.2% year-on-year to 331,762 MT in Q2.
Additionally, ICE-monitored cocoa inventories in US ports hit a 10.5-month high of 2,368,141 bags. The International Cocoa Organization projected a global cocoa deficit for 2023/24 of 494,000 MT, the largest in over 60 years, with production expected to decline by 13.1% year-on-year to 4.38 MMT.
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