Sat, May 18, 2024

Cacao Bean Prices Surge: NY Up 2.61%, London Climbs 3.73%

Cocoa, cocoa bean

Quick Look:

  • Cacao bean prices in New York and London witnessed significant increases, with NY’s CCN24 up by 2.61% and London’s CAN24 by 3.73%.
  • Ivory Coast and Ghana producers report severe production drops, with forecasts hitting multi-year lows due to bean shortages.
  • Ivory Coast and Ghana boosted farm-gate prices by 50% and 58%, respectively, to support cocoa farming sustainability amidst financial pressures.

The cocoa market is experiencing a significant transformation, with prices in New York and London markets showing remarkable recovery this May. The Intercontinental Exchange (ICE) in New York reported that cocoa prices for CCN24 have increased by 187 points, marking a 2.61% rise. Concurrently, in London, ICE Cocoa CAN24 surged by 224 points, equating to a growth of 3.73%. This resurgence follows a period of record highs in April, where cocoa prices hit all-time peaks due to persistent supply concerns.

On April 19, the market witnessed unprecedented price levels, propelled by ongoing worries over cocoa bean availability. Liquidity issues further compound these concerns, as cocoa futures are near their lowest liquidity in over a decade, highlighting underlying market tensions.

Severe Production Drops in Ivory Coast and Ghana Forecast

The supply shortage narrative is underscored by critical negotiations involving the Ghana Cocoa Board. Recently, they proposed the delivery of between 150,000 to 250,000 metric tonnes (MT) of cocoa due to the unavailability of beans. Significant production downturns in major cocoa-producing nations mirror this alarming trend. Ivory Coast, notably the world’s leading cocoa producer, has seen its shipments drop by 30% compared to the previous year. Furthermore, 2023/24 production is forecasted to plummet by 21.5% year-on-year to an eight-year low of 1.75 million MT.

In Ghana, the outlook is equally grim. The 2023/24 harvest is projected to reach a 22-year low of 422,500 MT to 425,000 MT. These dire statistics reflect broader supply concerns, including a steep projected global cocoa deficit of 374,000 MT for the 2023/24 season.

Cocoa Grinding Trends: North America Up 9.3%, Europe Down 2.2%

Amidst these supply pressures, cocoa grindings—a key indicator of demand—present a mixed picture. North America reported a robust quarter with a 9.3% increase quarter-over-quarter and a 3.7% rise year-over-year. Asia saw a modest increase of 5.1% quarter-over-quarter despite a slight year-over-year decline of 0.2%. Conversely, Europe experienced a decrease of 2.2% year-over-year despite a quarterly rise of 4.7%.

Complex Cacao Bean Market Dynamics for a Sustainable Future

The Ivorian and Ghanaian governments have responded to these challenges by significantly increasing the farm-gate prices for cocoa. Ivory Coast announced a 50% price increase for mid-crop beans. Moreover, Ghana declared a 58% hike for the rest of the 2023/24 season. These adjustments are crucial in ensuring the sustainability of cocoa farming amidst financial pressures.

Furthermore, climate change continues to be a pivotal factor, with erratic weather patterns adversely affecting cocoa production. Recent statements from Maxar Technologies noted improvements due to rain showers in Ivory Coast and Ghana, which may mitigate some immediate concerns but highlight the vulnerability of cocoa agriculture to climate variability.

YOU MAY ALSO LIKE

Oil prices

Quick Look: China’s industrial output increased by 6.7% in April, signalling stronger

China Less Inclined To Support The US in Ukraine War

Quick Look: Retail sales grew by 2.3% in April, below the forecast

Stocks and important factors

Quick Look: GameStop rose 126%, causing $1.8B in short-seller losses; AMC increased

COMMENTS

Leave a Comment

Your email address will not be published. Required fields are marked *

User Review
  • Support
    Sending
  • Platform
    Sending
  • Spreads
    Sending
  • Trading Instument
    Sending

BROKER NEWS

Dutch Neobank BUX Names Marcel Jongmans as Chairperson

BUX Holding, the parent firm of mobile investment platform BUX, today announced Marcel Jongmans as the board’s new Chairperson. With almost 30 years in financial services, Jongmans will succeed Founder Nick Bortot, who

BROKER NEWS

Broker News

Dutch Neobank BUX Names Marcel Jongmans as Chairperson

BUX Holding, the parent firm of mobile investment platform BUX, today announced Marcel Jongmans as the board’s new Chairperson. With almost 30 years in financial services, Jongmans will succeed Founder Nick Bortot, who will