Cocoa Prices Fall as the Dollar Strengthens

Group 1: Cocoa Price Movements - Cocoa prices closed lower on Friday, with December ICE NY cocoa down 1.43% and December ICE London cocoa down 1.73% [1][2] - The decline in cocoa prices was influenced by a stronger dollar, leading to long liquidation in cocoa futures [2] - Cocoa prices had previously reached one-week highs due to weather concerns in West Africa, including heavy rain in the Ivory Coast and dryness in Ghana and Nigeria [2][4] Group 2: Supply and Demand Factors - Tighter cocoa inventories are supportive for prices, with ICE-monitored cocoa inventories in US ports falling to a 4.25-month low of 2,092,823 bags [4] - The Ivory Coast's cocoa exports showed a 5.8% increase year-on-year, but this was a slowdown compared to a previous 35% increase [4] - Weak global cocoa demand has negatively impacted prices, with significant declines in cocoa grindings reported in Europe, Asia, and North America [10] Group 3: Crop Conditions and Quality - Optimism about this year's cocoa crop harvest in West Africa is present, with a cocoa pod count reported to be 7% above the five-year average [6] - Quality concerns regarding the Ivory Coast's mid-crop cocoa are supportive of prices, with a projected decline of 9% in this year's mid-crop compared to last year [8] - Ghana's projected cocoa production for 2025/26 is expected to increase by 8.3%, which may exert bearish pressure on cocoa prices [11] Group 4: Global Cocoa Deficit and Future Projections - The International Cocoa Organization revised its 2023/24 global cocoa deficit to -494,000 MT, the largest deficit in over 60 years [12] - A forecasted global cocoa surplus of 142,000 MT for 2024/25 marks the first surplus in four years, with production expected to rise by 7.8% year-on-year [12]