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On May 1, 2023, cocoa prices fell with May ICE NY cocoa decreasing by 56 points (-0.69%) and May ICE London cocoa declining by 88 points (-1.39%) due to favorable weather conditions in West Africa, enhancing pod development and boosting yields for the upcoming mid-crop cocoa harvest. The International Cocoa Organization (ICCO) recently projected a global cocoa surplus of 142,000 MT for the 2024/25 season, marking the first surplus in four years. Furthermore, global cocoa production is expected to rise by 7.8% year-on-year to 4.84 million metric tons.
Cocoa inventories in US ports have rebounded to a 4-1/2 month high of 1,784,552 bags as of last Friday, recovering from a 21-year low of 1,263,493 bags earlier this year. Meanwhile, Ivory Coast’s cocoa exports for the marketing year from October 1 to March 23 reached 1.43 million metric tons, reflecting a 12% increase from the previous year. However, estimates for Ivory Coast’s mid-crop production are expected to be 400,000 MT, which is 9% lower than last year’s output of 440,000 MT.
Demand concerns have surfaced as high cocoa prices prompt major chocolate manufacturers like Hershey and Mondelez to reformulate recipes and adjust pricing strategies. The European Cocoa Association reported a 5.3% decline in Q4 European cocoa grindings to 331,853 MT, the lowest in over four years. Additionally, Ghana’s cocoa harvest forecast was lowered to 617,500 MT, down 5% from prior estimates, which could support cocoa prices amid tightening supplies.
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