Cocoa prices fell 4.4%, lowest in 4 months, keeping an eye on Ivory Coast-Ghana's recovery.

“Cocoa prices” fell 4.4%, the lowest in four months, after more than doubling, expected production in Ivory Coast and Ghana. which is a major producer There may be a small deficit of 4 tons for this season.

On July 30, 2024, The Business Times reported that cocoa futures prices fell to their lowest level in over four months as traders focused on increased production next season versus declining demand prospects.

The most actively traded futures contract fell 4.4% to $6,650 a tonne in New York. This is the lowest price since the beginning of March. Futures are down about 13% this month after more than doubling earlier this year. Due to the end of the El Niño phenomenon And the trend of changing to La Niña will result in increased production.

The improved outlook for next season is boosting prices, with some analysts believing the market will turn surplus in the upcoming 2024-2025 season after three consecutive years of deficits. However, analysts from Fitch Solutions' BMI unit say they remain cautious about the production recovery in Ivory Coast and Ghana, major producers, and forecast a small deficit of 110,000 tons for this season.

Analysts say that prolonged periods of soaring cocoa prices could impact demand and slow down cocoa grinding. Chocolate companies have already warned that profit margins could come under pressure in the second half of the year as they purchase cocoa beans at higher prices following this year's price surge.

Nestle, the manufacturer of KitKat, revealed that consumers faced a difficult environment in reporting earnings last week because customers wanted cheaper products. Lindt & Spruengli stated that the global chocolate market is facing a slowdown for some products.

Reference: businesstimes.com.sg