Cocoa futures saw a decline in New York as traders locked in profits following a sharp rally. The most-active contract dipped in thin trading ahead of the public holidays, with last week’s record-high prices encouraging traders to take gains.
The rally had been driven by forecasts of reduced cocoa output in top producers, Ivory Coast and Ghana, amid already tight global supply. Market analysts are keeping a close watch on the development of cocoa crops in West Africa, as the region enters the Harmattan season—a dry, dusty wind from the Sahara that affects cocoa tree growth.
Farmers in West Africa are already noticing the negative impact on their crops. “It hasn’t rained for over two months, and the cocoa trees are starting to show signs of stress,” said Michael Acheampong, a cocoa farmer in Ghana’s Kwabeng area. “This has been further compounded by the Harmattan, which has intensified.”
The supply concerns and weather conditions in the region have been key factors influencing cocoa prices, with traders expecting continued volatility in the market as West Africa’s dry season progresses.
