Cocoa prices on the ICE exchange rose more than 7 % driven by adverse weather in West Africa and global supply concerns. Droughts and heavy rains have affected production in Ghana, Côte d'Ivoire, Nigeria and Cameroon, triggering a wave of short selling in the market.
In Côte d'Ivoire, the leading global producer, deliveries in the 2024/2025 season fell by 2 % y-o-y to 10 August. The pace of exports has moderated, and port inventories monitored by ICE fell to their lowest level in almost two months, with 2.28 million bags in storage.
Weather conditions have deteriorated grain quality in Cameroon and Nigeria, where rains have made it difficult to dry the crop. In Ghana, producers report wilting of small cobs, while in Côte d'Ivoire a better 2025-2026 season is expected thanks to the current conditions for cherelles.
Higher cocoa prices are already impacting the chocolate industry. Lindt & Spruengli cut margin forecasts after a larger than expected drop in sales, and Barry Callebaut reduced its volume forecast due to persistently high prices. Despite weak demand, the market maintains a bullish outlook due to the risk of structural shortages.
Experts say the solution to cocoa tree diseases could require technologies such as CRISPR gene editing, already being tested by the multinational Mars. In Cameroon, the National Institute for Research and Development is working on climate-resistant hybrid varieties.
Technical analysts place key support between $7,700 and $8,000 per tonne and resistance levels in the range of $9,500 to $10,000. The current rally reflects the unwinding of large commercial short positions and the strengthening of speculative bets on the upside.
Source: xtb.com; CFTC