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Weather Concerns in West Africa Boost Cocoa Prices
Nasdaqยท2025-09-11 20:04

Cocoa Prices and Market Dynamics - Cocoa prices have increased for two consecutive days, with December ICE NY cocoa closing up by 0.80% and December ICE London cocoa up by 0.50%, driven by weather concerns in West Africa [1] - Tighter cocoa inventories are supporting prices, with ICE-monitored cocoa inventories in US ports falling to a four-month low of 2,099,630 bags [3] - The slowdown in cocoa exports from the Ivory Coast is bullish for cocoa prices, with shipments reported at 1.81 million metric tons (MMT) for the marketing year, a 5.8% increase from last year but down from a larger 35% increase seen in December [3] Supply and Quality Concerns - Quality issues regarding the Ivory Coast's mid-crop cocoa are supportive of prices, with the average estimate for this year's mid-crop at 400,000 MT, down 9% from last year's 440,000 MT [7] - Optimism about this year's cocoa crop harvest in West Africa is present, with Mondelez reporting a cocoa pod count 7% above the five-year average [5] - Nigeria's cocoa production is projected to fall by 11% year-on-year to 305,000 MT for the 2025/26 crop year, which is supportive for cocoa prices [8] Demand Trends - Weakness in global cocoa demand has been a bearish factor, with Q2 European cocoa grindings down 7.2% year-on-year to 331,762 MT, and Q2 Asian cocoa grindings down 16.3% year-on-year to 176,644 MT, the smallest amount for a Q2 in eight years [9] - Higher cocoa production in Ghana is bearish for cocoa prices, with the Ghana Cocoa Board projecting an 8.3% year-on-year increase in the 2025/26 crop to 650,000 MT [10] Global Cocoa Market Outlook - The International Cocoa Organization (ICCO) revised its 2023/24 global cocoa deficit to 494,000 MT, the largest deficit in over 60 years, with production falling by 13.1% year-on-year to 4.380 MMT [11] - Looking ahead, ICCO forecasts a global cocoa surplus of 142,000 MT for 2024/25, marking the first surplus in four years, with production expected to rise by 7.8% year-on-year to 4.84 MMT [11]