Cocoa futures climbed above $3,250 per tonne, their highest level since February 18, as escalating geopolitical tensions in the Middle East triggered a wave of short covering. Traders grew increasingly concerned that the conflict involving Iran and potential disruptions in the Strait of Hormuz could drive up shipping costs and constrain cocoa shipments.
Despite these concerns, market fundamentals continued to reflect expectations of ample supply and subdued demand. Favorable weather conditions have improved production prospects in West Africa’s leading cocoa producers, Ivory Coast and Ghana, while weakening global demand has contributed to growing inventories. In response to declining international prices, both countries recently reduced the farm-gate prices paid to growers in an effort to stimulate sales.
