March ICE NY cocoa (CCH23) on Friday closed down -2 (-0.08%), and March ICE London cocoa #7 (CAH23) closed up +2 (+0.10%).
Cocoa prices Friday settled little changed. A stronger dollar (DXY00) Friday weighed on cocoa prices along with a survey from the International Cocoa Organization (ICCO) that said global cocoa stockpiles were 1.78 MMT at the end of the 2021/22 season, above a previous ICCO estimate of 1.62 MMT.
Smaller cocoa exports from Nigeria support cocoa prices after the Cocoa Association of Nigeria on Tuesday 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.
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.
Monday's report from the Ivory Coast government was bearish for prices as the report 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.
The quarterly report from the ICCO on December 1 was bullish for cocoa prices after ICCO said global 2021/22 cocoa production fell -8.0% y/y to 4.823 MMT as unfavorable weather and disease hampered cocoa yields. ICCO revised its 2021/22 global cocoa production figure downward by -419,000 MT from the September figure. The ICCO also raised the 2021/22 global cocoa deficit to -306,000 MT from a Sep forecast of -230,000 MT. In 2020/21, global cocoa production rose to a record 5.242 MMT, and the global cocoa market was in a surplus of +209,000 MT.
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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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