Cocoa prices are rising amid global supply concerns, with May ICE NY cocoa (CCK26) up 3.36% to $3,298 and May ICE London cocoa #7 (CAK26) up 3.18% to $2,455. The price surge follows Iran’s announcement of the closure of the Strait of Hormuz to shipping, increasing shipping rates, insurance costs, and fertilizer prices, which all contribute to rising import costs for cocoa buyers.
Recent reports reveal mixed cocoa demand trends: North America’s cocoa grindings fell 3.8% year-on-year to 106,087 MT, and European grindings declined 7.8% year-on-year to 325,895 MT. In contrast, Asian grindings increased by 5.2% to 223,503 MT. Ample global supply adds downward pressure, as ICE cocoa inventories reached a 19.75-month high of 2,624,492 bags.
Concerns over production continue, as Ghana cuts payments to farmers by nearly 30% and the Ivory Coast reduces payments by 57%, reflecting difficulties in farmer income amid adverse weather conditions. Overall, the Ivory Coast and Ghana, which produce over half of the world’s cocoa, maintain stable shipments at 1.48 MMT this marketing year, unchanged from last year.
