Cocoa prices have surged for eleven consecutive sessions, reaching a new record level of $5,970 per metric ton, driven by persistent concerns regarding limited supplies.
Key cocoa producers, including Ivory Coast and Ghana, contend with constrained supplies resulting from spreading diseases in their plantations, exacerbated by seasonal Harmattan winds that bring dry weather, adversely affecting crop quality and yield.
The dry conditions associated with El Niño are expected to worsen the situation, potentially leading to further declines in cocoa production. Recent data indicates that Ivory Coast shipped 1.04 million metric tons (MMT) of cocoa to ports between October 1 and February 4, marking a 39% decrease from last year.
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Additionally, Ghana’s graded and sealed cocoa arrivals reached 341,000 metric tons by January 31 since the commencement of this season’s harvest on September 1, representing a 35% decline from the previous year’s 521,000 tons. Consequently, the surging cocoa prices are beginning to impact consumers and exert pressure on significant chocolate manufacturers.
Predictions for Cocoa price
Cocoa prices have surged by nearly 65% compared to a year ago, with New York futures prices hitting a 46-year peak. Despite relatively robust consumer demand, the upward trend in retail prices is anticipated to exert pressure on volume sales and constrain category growth for much of 2024.
The value of cocoa is expected to stay high until a new African crop enters the market in late 2024. Consequently, further increases in chocolate confection prices are anticipated throughout the year, with little likelihood of a resurgence in consumer engagement with the category, per the research findings from Cobank released on February 1.
Using technical indicators for price prediction
Since the start of 2024, cocoa has risen by $1,759 per metric ton or 41.92%, as indicated by trading on a contract for difference (CFD) linked to the benchmark market for this commodity.
And while the current trend is notably bullish, analysts and global macro models from Trading Economics anticipate cocoa to trade at $4,947.53 per metric ton by the end of this quarter. Projections estimate it to reach $5,248.78 in the next 12 months.
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