Cocoa Prices Begin to Fall

As the weather improves in West Africa, cocoa prices have begun to fall, reports Financial Times. As of Thursday, cocoa futures fell for six consecutive days, the longest loss streak since 2022.

“The years-long bull market in cocoa may have finally ended as prices fell by enough to trigger our risk-management liquidation rules,” said Eric Crittenden, chief investment officer of Standpoint Asset Management, in a monthly update.

Ghana and Ivory Coast, two countries that produce roughly 66 percent of the world’s cocoa beans, failed to meet orders for hundreds of thousands of tons of beans over the last few months, according to the report.

Carlos Mera, head of agricultural commodities at Rabobank, said that Ghana had produced only 500,000 tons of the 800,000 tons it had contracted to sell to the world’s big food processors, and the remainder had to be rolled over for delivery to the next season. As the price rose, “many physical buyers had to buy back their short hedges,” he said.

Mera also said that this year’s price peaks had been driven by both “shockingly low” crops in the region and the fact that “more cocoa had been sold than there was in existence.”

Following the arrival of seasonal rains in the two West African countries, Mera expects to see “some recovery,” adding that new plantations in countries including Ecuador will also help to sate demand. Full Story (Subscription Required)