Cocoa prices rise as traders focus on crop prospects in West Africa
TLDR
- Cocoa prices in New York increased by 2.6% due to focus on production outlook in key West African countries.
- Recent weather patterns in Nigeria and Cameroon show potential benefit for crop growth, with more showers expected.
- Drier conditions in other West African regions may stress crops, posing ongoing threats and maintaining historically high cocoa prices.
Cocoa prices in New York rose by as much as 2.6%, reversing earlier losses as traders concentrated on the production outlook in key West African countries.
Recent weather patterns have shown light to moderate rain in Nigeria and Cameroon, with additional showers expected this week, which could benefit crop growth, according to forecaster Maxar.
However, other regions in West Africa are likely to experience drier conditions, potentially stressing the crops. These ongoing weather risks and challenges faced by farmers continue to pose a threat, keeping cocoa prices historically high.
Key Takeaways
Cocoa prices, while having retreated from a record high set earlier this year due to expectations of improved harvests in some West African countries, are still double what they were a year ago. As Africa’s main-crop harvest nears, traders are closely monitoring weather conditions, which will be crucial in determining the crop's outcome. In southeast Nigeria, farmers are struggling to access plantations due to heavy rains, while dry conditions in the southwest are impacting the growth of seedlings planted in late May. These factors could influence cocoa prices in the coming months.
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