On Monday, September ICE NY cocoa (CCU25) closed up +99 (+1.22%), while September ICE London cocoa #7 (CAU25) closed down -66 (-1.20%). London cocoa fell to an 8-month nearest-futures low following requests from several EU member states to delay the implementation of new rules aimed at curbing global deforestation, which would have affected cocoa imports from Brazil and Ivory Coast.
Meanwhile, Ivory Coast cocoa exports reached 1.71 million metric tons (MMT) from October 1 to July 6, marking a 6.2% increase year-over-year, but well below the larger growth observed earlier. Reports indicate that heavy rain in the region is hindering the ongoing mid-crop cocoa harvest, which is projected to yield 400,000 MT this year—down 9% from last year’s 440,000 MT. Additionally, ICE-monitored US cocoa inventories are currently at 2,286,458 bags, just shy of a 10-month high.
Global cocoa production is facing a significant downturn; the International Cocoa Organization revised its 2023/24 global cocoa deficit to -494,000 MT, the largest in over 60 years, while also predicting a 7.8% increase in production for the 2024/25 cycle. Weaker demand from cocoa processors has been evident, with Q1 North American grindings down 2.5% year-over-year.
