Cocoa Prices Slip on Ample Ivory Coast Supplies

March ICE NY cocoa (CCH23) on Tuesday closed down -23 (-0.88%), and March ICE London cocoa #7 (CAH23) closed down -9 (-0.45%).

Cocoa prices Tuesday posted moderate losses as ample cocoa supplies from the Ivory Coast weighed on prices.  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.

Losses in cocoa Tuesday were limited by smaller cocoa exports from Nigeria after the Cocoa Association of Nigeria reported Nigeria's Dec cocoa exports fell -0.7% m/m and -73% y/y to 36,571 MT.  Nigeria is the world's fifth-largest cocoa bean producer.

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.

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.
 

• Sugar Prices Gain after Brazil Boosts Ethanol Prices
• Weak Dollar Spurs Short Covering in Coffee
• Should Investors Buy Into Unusual Options Volume for DoorDash (DASH)?
• Coffee Recovers from Early Losses on Dollar Weakness