Cocoa prices surged on June 12, 2023, with July ICE NY cocoa (CCN26) rising by 6.72% to $4,144 and July ICE London cocoa #7 (CAN26) increasing by 5.68% to $3,143. These gains coincide with confirmed weather risks from an El Niño pattern, anticipated to bring warmer, drier conditions to West Africa, potentially reducing cocoa yields. The U.S. NOAA estimates a 67% chance of a “Super El Niño” this year.
Fund positions also influenced market dynamics, as funds increased their net-short positions in NY cocoa to 27,286— the highest in over three years. Deliveries from the Ivory Coast further complicate the picture; the country reported cumulative cocoa shipments of 1.95 million metric tons, an 18.9% increase year-over-year, yet projected a 10.8% decline in production for the 2025/26 season.
Rising cocoa inventories reached a 1.75-year high of 2,929,074 bags recently, adding bearish pressure. Compounding these factors, supply disruptions from the prolonged closure of the Strait of Hormuz have heightened costs for cocoa importers, while weak global demand is evident in Q1 declines across North American and European cocoa grindings.
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