Cocoa prices fell on Thursday, with May ICE NY cocoa closing down 1.06% and London cocoa down 1.05%, continuing a trend of consolidation after recent losses. This decline follows a significant increase in supplies from the Ivory Coast, where shipments reached 1.45 million metric tons, up 0.7% from last year, alongside a rise in ICE cocoa inventories to a 19.25-month high. Additionally, weak demand signals, particularly for chocolate during the Easter season, are contributing to the bearish sentiment in the market.
The combination of ample supply and declining demand is pressuring cocoa prices. Notably, Barry Callebaut reported a 22% drop in sales volume in its cocoa division, highlighting broader market challenges. Furthermore, Ghana and the Ivory Coast have announced substantial cuts to cocoa farmer payments, which could impact future production levels.
Market professionals should monitor these dynamics closely, as the potential for short-covering rallies exists given the excessive short positions in London cocoa. However, the prevailing supply-demand imbalance suggests continued downward pressure on prices in the near term.
Source: nasdaq.com