FX.co ★ Cocoa Futures at Over 2-Week High

Cocoa futures have surged to nearly $6,000 per tonne, marking the highest point since December 12. This uptrend is driven by anticipated index-related purchases due to the forthcoming inclusion of cocoa futures in the Bloomberg Commodity Index (BCOM) from January onward. Traders are also keeping a close eye on supply dynamics. Recent figures reveal that ICE-monitored cocoa inventories at US ports have decreased to a 9.5-month low, totaling 1,626,105 bags as of December 26. Additionally, the grind in Ivory Coast—a critical indicator of cocoa demand—declined by 6.7% year-on-year, amounting to 56,696 metric tons of beans in November, as reported by the exporters' association GEPEX. Despite this, cocoa prices are projected to decline by over 50% this year, largely due to improving supply projections in the crucial West African production region. Farmers in the leading cocoa-producing country of Ivory Coast have observed that recent rainfall is expected to boost the February-to-March harvests, yielding larger and more plentiful pods compared to the same period last year.