Ivory Coast’s Cocoa Sales Slow as Price Surge Raises Hedging Risks

AFRICAN STOCKS AND FINANCEFebruary 21, 2025 at 11:52 AM UTC

TLDR

Forward sales of Ivory Coast’s 2025-26 cocoa crop have started slowly, with less than 200,000 tons sold as of early February
The delay comes as cocoa futures have surged to record levels, prompting higher margin requirements on the Intercontinental Exchange
These increased costs make it riskier for traders to hedge purchases, reducing their willingness to buy beans in advance

Forward sales of Ivory Coast’s 2025-26 cocoa crop have started slowly, with less than 200,000 tons sold as of early February, compared to at least four times that amount last year, sources familiar with the matter said.

The delay comes as cocoa futures have surged to record levels, prompting higher margin requirements on the Intercontinental Exchange (ICE). These increased costs make it riskier for traders to hedge purchases, reducing their willingness to buy beans in advance.

The Conseil du Cafe-Cacao (CCC), Ivory Coast’s industry regulator, said it follows international prices but did not comment on sales volume. The country, which controls pricing and forward sales, typically pre-sells large portions of its main crop, while reserving the smaller mid-crop for local processors.

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Key Takeaways

Rising global cocoa prices, driven by supply shortages, have made hedging costlier, slowing forward sales in the world’s top cocoa-producing nation. Traders are exercising caution amid increased financial pressure, potentially affecting market liquidity and farmer payments. If price volatility continues, it could impact cocoa supply chains and pricing strategies, adding pressure on chocolate manufacturers and consumers. Ivory Coast’s ability to manage forward sales efficiently will be crucial in maintaining market stability.

Commodities

Cocoa

Ivory Coast

Finance

Agriculture