Cocoa futures have traded around $7,000 per tonne, marking their lowest point since mid-March. Traders are observing notable fund liquidation of long positions. Favorable weather conditions in the leading cocoa-producing countries, Ivory Coast and Ghana, are enhancing the outlook for the main crop, effectively tempering cocoa prices after a substantial rally earlier this year.
Farmers have rorted that while most regions in the Ivory Coast experienced below-average rainfall last week, the moisture levels were adequate to support the development of the primary crop cycle from October to March. On the demand side, Jefferies has cautioned that chocolate sales are significantly underperforming compared to other snack categories, attributed to high prices that are driving consumers toward more affordable alternatives. The brokerage highlighted that over the past year, cocoa prices have escalated sharply, creating a widening price disparity between chocolate products and other snack choices.
Since the start of 2024, cocoa prices have surged by 2,779.66 USD/MT or 66.25%, according to trading on a contract for difference (CFD) that monitors the commodity's benchmark market. Analysts predict that cocoa will trade at 8,183.43 USD/MT by the conclusion of this quarter, with estimations indicating a potential rise to 9,639.41 USD/MT within the next 12 months.