Cocoa Futures Hit Six-Month High on West African Supply Concerns
TLDR
- Cocoa futures climbed to $10,092 per ton in New York on Friday, the highest level since June 14.
- Mounting fears over reduced output in West Africa tightens global supply.
- Ivory Coast and Ghana, the world’s largest cocoa producers, face declining production prospects.
Cocoa futures climbed to $10,092 per ton in New York on Friday, the highest level since June 14, as mounting fears over reduced output in West Africa tightened global supply. The most-active contract has risen for six consecutive weeks, the longest rally since March.
Ivory Coast and Ghana, the world’s largest cocoa producers, face declining production prospects due to dry weather and the seasonal Harmattan winds.
Low US cocoa bean stockpiles, now at their lowest since 2004, have compounded supply concerns, driving up prices. Market players, including Pierre Andurand, have pointed to a structural deficit caused by poor harvests and dwindling inventories in consuming countries.
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Key Takeaways
Cocoa and Arabica coffee prices are rising on supply shortages. Cocoa futures reflect tightening stocks and worsening weather in key regions, while Arabica coffee prices gained 4%, heading for their fifth straight weekly increase. Analysts predict further increases, with cocoa and coffee markets under pressure from declining production and bullish speculative activity.
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