2024-02-04 12:55:14
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$5,009 per ton futures contracts for March delivery
February 4, 2024
16:55 pm
Cocoa futures rose on the American ICA Futures Exchange, Friday, to their highest levels in more than 46 years.
“The availability of cocoa from West Africa remains constrained and expectations are growing for another shortfall in production versus demand next year,” Jack Scoville, vice president of Price Futures Group, wrote in a report Friday.
He added: “Traders are concerned about another short production year, and these feelings have been reinforced by the El Nino phenomenon, which threatens West African crops with hot and dry weather.”
Upon settlement, cocoa futures prices for March delivery, the most active, increased $53, or 1.15, to settle at $5,009 per metric ton, the highest close for the most active contract since July 20, 1977, according to Dow Jones data.
Cocoa futures prices rose 15% in January, recording the best monthly gain since November 2020.
“There are concerns that dry weather, fueled by harmattan winds, could affect the mid-crop harvest in West Africa, which begins in April,” Commerzbank analysts wrote in a note dated Friday. Harmattan is a cold, dry wind that blows from the northeast or east in the Western Sahara.
“The cocoa crop is already lagging significantly behind the previous year’s level,” analysts at Commerzbank said, with exports from Ivory Coast, the largest cocoa-producing country, declining by 35% from the beginning of the harvest year in October until the end of January, compared to the same period of the year. the past.
“This means that the cocoa market is likely to face a supply deficit for the third year in a row,” analysts said.
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