On May 29, cocoa prices rose significantly, with July ICE NY cocoa increasing by 10.33% to $4,192.00 and July ICE London cocoa #7 up 10.84% to $3,188.00, reaching 1.5-week highs. This surge was attributed to fund short-covering driven by heavy rains in the Ivory Coast, which have caused flooding and restricted farmer access to cocoa plantations. Additionally, concerns over a potential El Niño weather pattern pose risks to cocoa production in West Africa.
The US National Oceanic and Atmospheric Administration (NOAA) suggests an 82% chance of El Niño conditions emerging and affecting production as they persist through the end of the year. Meanwhile, StoneX has revised its 2026/27 global cocoa surplus estimate down to 149,000 MT from 267,000 MT, indicating tightening supply conditions. Cocoa exports from Nigeria have also plummeted, with March exports falling 35% year-on-year, echoing potential supply issues.
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