On Thursday, cocoa prices extended their Wednesday gains and reported new contract highs due to global concerns about the crop’s production.
Coco futures for December delivery went up by 0.13% to $3,731.00 per metric ton on September 14’s Asian afternoon session.
Moreover, higher costs were accelerated in London amid a weaker British pound. It tumbled to a 3-1/4 month low against the US dollar.
Its value trended higher over the past year as the NY crop nearest-futures hit a 44-year high on Wednesday.
The recent heavy rains in West Africa caused the black pod disease to spread. As a result, cocoa pods turned black and rotted, lowering the crop’s quality and production. Experts said it pushed the global market of the commodity into a third year of deficit for the 2023/24 season.
Additionally, the Ivory Coast is experiencing the spread of the swollen shoot virus that threatens growing areas. It is transmitted by mealybugs feeding on the sap, significantly reducing yields before killing the plant.
Furthermore, lower outputs in Ghana, the second-largest global producer, result in positive price movements. Based on a cocoa regulator from the country, farmers would unlikely meet some of its contracts for a second season.
Also, the regulators postponed 44,000 MT of shipments amid supply shortages. Its 2022/23 crop is not anticipated to decline to 650,000 MT, 24.00% below the 850,000 MT estimates.
Chocolate and Cocoa Market to Reach Highs
According to the latest market reports, the global cocoa and chocolate market is projected to reach billions-worth in size.
The estimates equated to a $49.59 billion value and are anticipated to reach a $74.39 billion market size in 2023. In the 2023-2023 forecast period, it is expected to grow at a 5.20% compound annual growth rate.
Moreover, some chocolate-making companies will have the bottom line affected by the year-to-date 45.00% cocoa price spike.
Another factor boosting the market is the growing interest in premium and artisanal chocolates. Customers and enthusiasts have been seeking high-quality and unique experiences with chocolate sweets.
