COCOA prices reached their highest point in 46 years on the Intercontinental Exchange in London on Wednesday, driven by concerns over bad weather in West Africa, which poses a threat to the production prospects of the main suppliers of cocoa, the primary raw material used in chocolate manufacturing.
The benchmark September contract for cocoa in London experienced a gain of more than 2 percent
on Wednesday, reaching £2,590 per metric ton, Reuters reported. The session’s peak price of £2,594 was the highest recorded since 1977.
The surge in prices is a reaction to the tight market for cocoa beans, predominantly produced in Cote d’Ivoire and Ghana. Cote d’Ivoire’s cocoa arrivals for export have declined by nearly 5 percent this season, according to Reuters.
The International Cocoa Organisation (ICCO) recently revised its forecast for a global deficit on cocoa supply, increasing it from 60,000 metric tons to 142,000 metric tons.
‘It is the second consecutive season with a supply deficit,’ noted Leonardo Rosseti, a cocoa analyst at broker StoneX. He further highlighted that the stocks-to-use ratio, an indicator of cocoa ava
ilability in the market, is expected to drop to 32.2 percent, the lowest level since the 1984/85 season.
The excessive rainfall in Cote d’Ivoire has led to flooding in some cocoa fields, posing a potential threat to the upcoming main crop that begins in October. Additionally, the rains are hampering the drying process f
or already harvested cocoa beans.
Refinitiv Commodities Research predicts moderate to high rainfall in the West African
cocoa belt over the next 10 days, exacerbating the concerns surrounding supply.
Cocoa prices also saw an increase in New York, with the September contract rising 2.7 percent to $3,348 per metric ton, reaching its highest level in 7-1/2 years.
In the realm of other soft commodities, July raw sugar witnessed a decline of 0.46 cent, or 2 percent, settling at 22.57 cents per pound. Arabica coffee settled down 5 cents, or 3 percent, at $1.6195 per pound, while robusta coffee fell $99, or 3.6 percent, to $2,616 per metric ton.
