Cocoa prices experienced a significant decline on Friday, with May ICE NY cocoa closing down 5.38% and May ICE London cocoa down 4.17%. This drop follows reports of weak global demand, particularly in North America and Europe, where cocoa grindings fell by 3.8% and 7.8% year-over-year, respectively. The larger-than-expected declines highlight a bearish trend in chocolate consumption, as evidenced by a 1.3% decrease in North American chocolate candy sales over the past 13 weeks and a 5% drop during the recent Easter holiday.
The market’s outlook is further pressured by rising cocoa inventories, which reached a 19.75-month high, and increased shipments from the Ivory Coast. Despite a slight rise in Asian cocoa grindings, the overall supply dynamics, including anticipated production cuts from major producers, suggest ample supply could continue to weigh on prices.
Market professionals should monitor these developments closely, as the combination of weak demand and increased supplies could lead to further price declines in the cocoa market.
Source: nasdaq.com