FX.co ★ West African Crop Optimism Weighs on Cocoa

Cocoa futures experienced a decline of over 3.5%, dipping below $6,200 per tonne and distancing themselves from the one-month peak of $6,600 per tonne. This shift is attributed to optimistic forecasts for a robust cocoa harvest in West Africa. Farmers in the Ivory Coast have reported that the cocoa trees are in excellent condition, with the dry weather positively impacting the drying process. Similarly, Ghanaian farmers have observed favorable weather conditions that are contributing to the healthy maturation of cocoa pods. In line with this, Mondelez, a prominent chocolate manufacturer, announced that the current cocoa pod count in West Africa surpasses the five-year average by 7%, and is notably higher than figures from the previous year. As the main harvesting season kicks off in Ivory Coast, producers are hopeful about maintaining high quality. On the demand front, concerns persist as subdued consumption has further influenced pricing. Barry Callebaut, a leading chocolate producer, revealed in its financial report that it expects a decline in cocoa product sales by mid-single digits in the forthcoming fiscal year, owing to persistently high prices.