On Monday, cocoa prices tumbled on optimism that West African crop output will recoup amid recent below-average rainfall.
The commodity’s futures price for December delivery closed the US trading session by declining -4.55% to $7,054.00 per metric ton (MT).
Furthermore, the Ivory Coast farmers reported that cocoa plants are recovering despite below-average precipitation. Nigerian crop growers mentioned that the recent dry weather has enabled them to use insecticides and fertilizers, reducing the risk of pests and crop diseases.
According to reports, West Africa’s low commodity production is also bullish for crop prices. Government data revealed that Ivory Coast farmers delivered 1.67 million metric tons (MMT) of cocoa to ports from October to August, which is -28.00% lower than the previous year.
Meanwhile, reports show that a bearish factor for cocoa is a better forecast for next season in West Africa. The transition from El Niño to La Niña is expected to increase rainfall in Ivory Coast and Ghana, improving soil moisture and boosting cocoa yields.
Worries over the availability of cocoa beans for purchasers have primarily aided crop prices. Moreover, concerns about West African mid-harvests have been raised, which are lower than the two-yearly outputs.
On the other hand, Ghana’s mid-yield has been reduced to 25,000 MT, compared to the earlier 150,000 MT forecast.
Australian Chocolate Prices Rise on Cocoa Output Concerns
Chocolate prices rose amid cocoa supply woes, and their futures dropped in the closed trading session.
In Australia, the price of Cadbury’s Freddo bar has doubled from $1.00 to $2.00, the first price hike in over ten years.
According to reports, cocoa’s better performance last week significantly impacted chocolate product prices.
However, this year, solid global demand for chocolate and lower cocoa crops due to unfavorable weather, aging trees, and crop diseases has driven cocoa bean prices to record highs. These factors have been cited as the primary reasons for the price surge.
