On Tuesday, cocoa prices rallied due to dry weather concerns in West Africa that might halt crop production.
In the Asian afternoon session, the commodity’s futures for December delivery rose by 3.77% to $7,354.00 per metric ton.
Analysts observed that top cocoa-producing countries in West Africa and Ghana experienced a significant decline in rainfall last month. This led to below-normal soil moisture levels and restricted crop growth.
According to the government data, Ivory Coast farmers have shipped 1.68 million metric tons (MMT) of cocoa to ports, a -28.00 decline from last year.
Moreover, sluggish US crop supplies have aided the commodity’s prices. On Monday, reports showed that stocks delivered in the country’s ports dipped to a nearly eight-year low of 2.68 million bags.
Meanwhile, a solid outlook for the next crop season in West Africa is bearish for prices. The shift from El Nino to La Nina is also expected to boost rainfall in the Ivory Coast and Ghana, increasing soil moisture and cocoa production.
Furthermore, downward pressure on cocoa prices came from Ghana’s cocoa regulator’s forecast that the country’s crop production will recover to 700,000 metric tons (MT) from this year to 2025. This represents a significant increase from the 425,000 MT produced last year.
Ivory Coast Cooler Weather Raised Concerns for Cocoa Farmers
Cocoa farmers in the Ivory Coast have raised concerns about cooler-than-normal temperatures in West Africa.
According to reports, global crop prices have surged as supplies deplete amid weather-changing patterns.
Meanwhile, farmers noted that cocoa was developing well and anticipated a significant amount of good-quality beans leaving the bush next month. However, cold weather conditions concerned them last week.
Furthermore, crop growers said that the rainfalls were above average, mixed with sunny spells expected next month, and October would support the cocoa last longer compared to 2023.
They also added their positive sentiment that the crop would have a robust start in October.
