FX.co ★ Cocoa Market Consolidates Ahead of BCOM Inclusion

Cocoa futures have steadied around $6,000 per tonne in anticipation of their inclusion in the Bloomberg Commodity Index (BCOM) on January 8. This development is a significant driver of recent market volatility. Analysts suggest that major cocoa-producing countries are withholding sales, as the index inclusion could spur the purchase of 30,000 to 40,000 lots. Currently, weather conditions in key West African cocoa-producing regions remain favorable. Reports indicate a mild Harmattan, the typical desert wind in the region. In the leading cocoa-producing nation, Ivory Coast, farmers noted on January 5 that unusual rains in key regions are anticipated to significantly bolster the main crop finishing period from October to March. Additionally, earlier this year, the consultancy firm Tropical General Investments Group projected that the favorable weather would enhance cocoa harvests over the upcoming two months in both Ivory Coast and Ghana, the two largest cocoa producers globally.