March ICE NY cocoa (CCH23) on Monday closed up +39 (+1.52%), and March ICE London cocoa #7 (CAH23) closed up +25 (+1.26%).
Cocoa prices Monday closed moderately higher on comments from the CEO of Barry Callebaut, the world's biggest maker of chocolate and cocoa products, that China's return to domestic and international travel would boost chocolate sales. China's week-long Lunar New Year holiday began Saturday.
Ample cocoa supplies from the Ivory Coast are bearish for prices after Monday's report from the Ivory Coast government showed that Ivory Coast farmers sent a cumulative 1.51 MMT MT of cocoa to Ivory Coast ports for the 2022/23 marketing year from October 1 through January 22, up +9.4% y/y. The report eases concerns that the Harmattan winds are damaging West African cocoa crops.
Last Friday, NY cocoa fell to a 1-month low, and London cocoa dropped to a 5-week weak on global cocoa demand. Last Thursday, the National Confectioners Association reported that Q4 North American cocoa grindings fell -8.1% y/y to 107,130 MT. Also, the European Cocoa Association reported last Thursday that European Q4 cocoa grindings fell -1.7% y/y to 359,577 MT. Last Wednesday, the Cocoa Association of Asia said Asia Q4 cocoa grindings fell -0.2% y/y to 230,806 MT.
NY cocoa has underlying support from tighter cocoa supplies. ICE-monitored NY cocoa inventories held in U.S. ports have trended lower over the past four months and fell to a 9-month low on January 3. Also, ICE-monitored cocoa stockpiles held in EU ports remain at a 9-month low of 112,880 MT.
Cocoa prices have seen support from concern about the quality of some West African cocoa crops. Cocoa farmers continue to struggle with the lack of fertilizer and pesticides as the war in Ukraine has limited Russian exports of potash and other fertilizers worldwide.
The quarterly report from the International Cocoa Organization (ICCO) on December 1 was bullish for cocoa prices after ICCO said global 2021/22 cocoa production fell -6.8% y/y to 4.89 MMT as unfavorable weather and disease hampered cocoa yields. ICCO revised its 2021/22 global cocoa production figure downward by -67,000 MT from the September figure.
Larger cocoa exports from Nigeria are bearish for prices. News on December 22 showed that Nigeria's Nov cocoa exports jumped +130% m/m and +17% y/y to 36,819 MT. Nigeria is the world's fifth-largest cocoa bean producer.
ICCO on September 1 raised the 2021/22 global cocoa deficit to -230,000 MT from a June forecast of -174,000 MT. In 2020/21, global cocoa production rose to a record 5.24 MMT and the global cocoa market was in a surplus of +215,000 MT.
More Cocoa News from Barchart
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- Arabica Coffee Climbs on Reduced Brazil Coffee Exports
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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