On Tuesday, cocoa prices extended last week’s hike to a five-week high due to unfavorable weather events that could cut production.
Cocoa futures went up by 0.96% to $3,160.00 per metric ton on June 13’s Asian afternoon session.
An uncontrolled long position by New York contracts funds can encourage any long liquidation concern.
Moreover, another positive factor for cocoa prices is the lower output from the Ivory Coast. On Monday, the coast’s government announced that farmers sent a cumulative 2.16 MMT harvest to the ports. It is down by -2.30% year-on-year.
Last month, prices hit 6-3/4-year highs due to quality concerns in the mid-crop from the coast. Farmers witnessed poor quality, with bean counts only reaching 120 for every 100 grams. Besides, exporters chose counts of 80 to 100 for every hundred grams since the best quality has lower bean count.
Also, tighter cocoa supplies from Nigeria boosted prices after an association reported declining exports. It dropped by -46.00% month-on-month and -20.60% YoY to 9,924.00 MT.
Furthermore, the ICCO projected that global 2022/23 stockpiles would fall by -3.50% YoY to 1.65 MMT. They added that there would be a supply deficit amid weather variations, mainly hitting West Africa.
In addition, a quarterly report stated that global output fell by -8.00% due to unfavorable weather spiked cocoa prices.
Chocolate to be Pricier amid Higher Cocoa Prices
Chocolate lovers would have to deal with higher prices since the high cocoa costs are bound to rise further.
According to experts, the product’s prices went up by 14.00% in the previous year. Some market watchers added that they would be more costly due to tighter ingredient supplies.
Analysts mentioned that the cocoa market experienced an aggressive boost in prices. Also, they said that this season is the second deficit straight as ending stocks are expected to drop.
Based on other experts’ estimates, the market would face another deficit in the subsequent season from October to next September. By then, cocoa contracts could hit as high as $3,600.00 per metric ton.
