West African Weather Woes Boost Cocoa Prices

Group 1: Cocoa Price Movements - Cocoa prices are experiencing a significant increase, with December ICE NY cocoa up by 2.88% and London cocoa up by 2.06% [1][2] - NY cocoa has reached a 1.5-week high due to weather concerns in West Africa, particularly heavy rain in the Ivory Coast affecting cocoa field access [2][4] Group 2: Supply and Inventory Factors - Tighter cocoa inventories are supporting price increases, with ICE-monitored cocoa inventories in US ports falling to a 4.25-month low of 2,092,823 bags [4] - The pace of cocoa exports from the Ivory Coast has slowed, with shipments totaling 1.82 million metric tons (MMT) this marketing year, reflecting a 5.8% increase from last year but a decrease from a previous 35% increase [4] Group 3: Demand and Quality Concerns - Weak global cocoa demand has negatively impacted prices, with European cocoa grindings down by 7.2% year-on-year and Asian grindings down by 16.3% year-on-year [10] - Quality issues with the Ivory Coast's mid-crop cocoa, attributed to late rain, are supporting prices, with the average estimate for this year's mid-crop at 400,000 MT, down 9% from last year [8] Group 4: Production Outlook - Optimism regarding 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] - Ghana's cocoa production is projected to increase by 8.3% year-on-year for the 2025/26 crop year, which may exert downward pressure on cocoa prices [11] Group 5: Global Cocoa Deficit and Future Projections - The International Cocoa Organization (ICCO) revised its 2023/24 global cocoa deficit to 494,000 MT, the largest in over 60 years, with production down by 13.1% year-on-year [12] - 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 [12]