December ICE New York cocoa futures (CCZ24) ended Friday down 243 points, or 3.30%, while December ICE London cocoa #7 (CAZ24) slipped 1 point, a 0.02% decline.
Cocoa prices retreated from an early gain and closed lower as the U.S. dollar strengthened (DXY00). However, the decline in London cocoa was tempered by a weaker British pound (^GBPUSD), which provides support for cocoa priced in sterling.
Earlier in the week, cocoa faced pressure after reports showed an acceleration in Ivory Coast harvests. Data released Monday indicated that Ivorian farmers delivered 365,072 metric tons of cocoa to ports between October 1 and November 3, up 26% from 288,686 metric tons during the same period last year. Ivory Coast remains the world’s top cocoa producer.
Support emerged on Thursday when Barry Callebaut’s CEO noted that, although West African cocoa crops have shown “significant improvement versus last year,” they have yet to reach the levels seen in the 2022/23 season.
Declining global cocoa inventories are providing a bullish backdrop. ICE‑tracked cocoa stocks held in U.S. ports have fallen for 17 consecutive months, reaching a 19‑year low of 1,711,727 bags on Friday.
Prices were further pressured when the Ivory Coast regulator, Le Conseil Café‑Cacao, raised its 2024/25 production outlook on October 18 to a range of 2.1–2.2 million metric tons, up from the earlier June forecast of 2.0 million metric tons.
Demand signals were mixed. The National Confectioners Association reported on October 17 that North American Q3 cocoa grindings rose 12% year‑over‑year to 109,264 metric tons. The Cocoa Association of Asia noted a 2.6% increase in Q3 Asian grindings to 216,998 metric tons. Conversely, the European Cocoa Association reported a 3.3% drop in Q3 European grindings to 354,335 metric tons.
Cocoa found additional backing after Ghana’s Cocoa Board (Cocobod) lowered its 2024/25 production estimate on August 20 to 650,000 metric tons from the previous 700,000‑ton forecast. Adverse weather and disease cut Ghana’s 2023/24 harvest to a 23‑year low of 425,000 metric tons. As the world’s second‑largest cocoa producer, Ghana’s new crop season starts in October.
Output gains in Cameroon, the world’s fifth‑largest cocoa producer, are bearish for prices. Cameroon’s National Cocoa and Coffee Board said on August 21 that 2023/24 production rose 1.2% year‑over‑year to 266,725 metric tons. Meanwhile, Nigeria’s August cocoa exports increased 6.8% year‑over‑year to 14,984 metric tons; Nigeria ranks as the sixth‑largest producer globally.
A bullish factor emerged on August 30 when the International Cocoa Organization (ICCO) lifted its 2023/24 global deficit estimate to –462,000 metric tons from May’s –439,000 metric tons, marking the largest shortfall in over six decades. ICCO also trimmed its 2023/24 production forecast to 4.330 million metric tons from 4.461 million metric tons and projected that the 2023/24 stocks‑to‑grindings ratio would fall to a 46‑year low of 27.4%.
