July ICE NY cocoa (CCN22) on Wednesday closed up +44 (+1.80%), and July ICE London cocoa #7 (CAN22) closed up +33 (+1.88%).
Cocoa prices Wednesday posted moderate gains on signs of stronger global cocoa demand. Gepex, a cocoa exporter group that includes six of the world's biggest cocoa grinders, reported Wednesday that the group processed 49,148 MT of cocoa in April, up +16.3% y/y.
Cocoa prices this week had been on the defensive, with NY cocoa falling to a 2-week low Monday and London cocoa posting a 1-1/2 month low Tuesday. Bearish factors include a stronger dollar and signs of abundant cocoa supplies. The dollar index Monday climbed to a new 19-year high. Also, the Ivory Coast government reported Monday that Ivory Coast cocoa farmers sent a cumulative 2.06 MMT of cocoa to Ivory Coast ports from Oct 1-May 8, nearly unchanged from last year's 2.07 MMT.
Increased cocoa supplies from Nigeria, the world's fourth-largest cocoa producer, are bearish for prices after data on April 27 showed Nigeria's Mar cocoa exports rose +31.4% y/y to 28,149 MT.
The outlook for bigger cocoa production in Cameroon, the world's fifth-largest cocoa producer, is negative for cocoa prices after the director-general of the Cocoa Development Corp on Apr 13 projected that Cameroon's 2021/22 cocoa production would climb +20% y/y to 350,400 MT.
Demand concerns are weighing on cocoa prices after the North American Confectioners Association reported on Apr 22 that Q1 North American cocoa grindings fell -2.8% y/y to 114,694 MT. Also, the Cocoa Association of Asia reported Asian Q1 cocoa grindings fell -0.25% y/y to 213,313 MT. On the supportive side, however, the European Cocoa Association reported Apr 14 that Q1 European cocoa grindings rose +4.4% y/y to 373,498 tons, the most in more than a decade.
On Feb 28, the International Cocoa Organization (ICCO) projected that global 2021/22 cocoa production would fall -by 5.2% y/y to 4.955 MMT from a record 5.226 MMT in 2020/21. ICCO also estimates the global 2021/22 cocoa market will fall into a deficit of -181,000 MT from a surplus of +215,000 in 2020/21.
