Cocoa futures surged to their highest levels in over seven months, driven by concerns over crop prospects in West Africa, which threatens global supply amid historically low inventories. This could see Ghana’s cocoa export revenue improve further.
The most-active cocoa contract rose by 6.1% to $10,454 per metric ton, the highest since April 29, before slightly pulling back. This increase follows reports of unfavorable weather conditions in top-producing countries, Ivory Coast and Ghana.
Steve Wateridge, head of research at TRS by Expana, noted, “The outlook for the mid-crops has deteriorated in the past weeks. The next three months will be critical in determining further developments.”
West Africa’s key growing regions have entered the Harmattan season, which brings dry weather that could hinder crop growth, as low soil moisture and limited rainfall are expected. Maxar Technologies forecasts that these conditions will affect mid-year crop development.
While cocoa bean arrivals at ports in Ivory Coast are ahead of last year’s pace, recent data from ADM Investor Services showed arrivals last week fell below the five-year average, fueling concerns that the harvest may slow further.
As of 10:45 a.m. in New York, cocoa futures traded 2.6% higher at $10,112 per ton, while London cocoa prices rose by 2.3%.
