July ICE NY COCOA (CCN25) closed on Friday -1,221 (-12.61%), while July ICE London Cocoa #7 (CAN25) closed -149 (-2.51%).
Cocoa prices fell on Friday, with New York cocoa prices at a 2-month low and London cocoa prices at a 2-1/2-month low. The forecast for rainfall in West Africa is expected to benefit the cocoa crops in the region and damage the price of cocoa. Forecaster Vaisala said West Africa had moderate to heavy rains in the past few days and was expected to continue this weekend.
The current rebound in cocoa inventory is also a bearish price. Since falling to a 21-year low of 1,263,493 bags on January 24, ice-monitored cocoa inventory held in U.S. ports has rebounded and climbed to a 9-1/4-month high at 2,363,861 bags.
Cocoa prices are supported by slowing cocoa exports along the cocoa coast, which may lead to a tighter supply of available products in the future. Ivory Coast farmers shipped 1.66 MMT of cocoa from the marketing year from October 1 to June 15, an increase of +6.4% from last year, but a significant increase of +35% from December, government data showed.
Signs of smaller cocoa exports support cocoa prices after news on Wednesday said Nigeria’s cocoa exports fell to 18,561 tons in April. Nigeria is the fourth largest cocoa exporter in the world.
At the end of last month, NY Cocoa gathered to be the closest of 4-1/2 months, with the highest concerns about West Africa weather. According to the African Flood and Drought Monitor, although recent rainfall in West Africa still accounts for more than one-third of the Ghana and Ivory Coast.
Cocoa prices also support quality issues regarding Ivory Coast cocoa medium-sized works, the debris is currently continuing through September. Cocoa processors complained about the quality of the crops and rejected trucks of Ivory Coast cocoa beans. The processor reports that 5 to 6% of medium-sized cocoa in each truck has poorer mass compared to 1% during the main crop. According to Rabobank, poor quality of Ivory Coast mid-sized works is partly attributed to late rainfall in the region, which limited crop growth. The intermediate works are the smaller of the two-year annual cocoa harvest, usually starting in April. The average estimate for the Ivory Coast in the mid-term this year is 400,000 tons, -9% lower than last year’s 440,000 tons.
