On Wednesday, September ICE NY cocoa (CCU25) closed down 67 points (-0.76%) to settle at a 2-1/4 month low, while July ICE London cocoa #7 (CAN25) dropped 41 points (-0.68%). The decline in cocoa prices is attributed to optimism about West African cocoa crops, fueled by recent beneficial rains in the region.
Cocoa inventories held in U.S. ports have rebounded significantly from a 21-year low of 1,263,493 bags on January 24 to reach a 9-1/2 month high of 2,363,861 bags last Wednesday. In contrast, Nigerian May cocoa exports saw a 29% year-on-year decrease to 14,110 MT, which may help stabilize prices amid concerns about supply restrictions from the Ivory Coast. Additionally, the Ivory Coast’s mid-crop harvest is suffering quality issues, with about 5% to 6% of beans deemed poor quality.
The International Cocoa Organization (ICCO) has projected a global cocoa deficit of 494,000 MT for 2023/24, the largest in over 60 years. The ICCO reports a decline in cocoa production of 13.1% year-on-year to 4.380 MMT, reflecting ongoing challenges faced by cocoa farmers in the region.
