London’s benchmark September contract for cocoa rose more than 2% last week to £2,590 a tonne, according to Reuters. The trading high (Wednesday, June 28) was £2,594, the highest since 1977.
Analysts said a tight cocoa bean market has pushed up prices, with nearly 5% less cocoa arriving for export at ports in Ivory Coast, the world’s largest producer, this season. .
The International Cocoa Organization (ICCO) also announced that it has expanded its forecast for a global cocoa supply shortage to 142,000 tons from the previous 60,000 tons.
“It’s the second season in a row of undersupply.”Broker StoneX cocoa analyst Leonardo Rosseti told Reuters. The stock utilization ratio, a measure of cocoa availability on the market, is expected to fall to 32.2%, the lowest since 1984-1985, it said. season.
Côte d’Ivoire’s main crop, which starts in October, was hit by above-normal rains in June, affecting the drying process of already harvested cocoa beans.
Cocoa prices also rose in New York at the end of June. September contracts rose 2.7 percent to $3,348 a tonne, the highest in seven and a half years, according to Reuters.
Among other soft commodities, raw sugar fell 0.46 cents (2%) in July to 22.57 cents per pound. Arabica coffee fell 5 cents, or 3%, to $1.6195 a pound. Meanwhile, Robusta coffee fell by $99, or 3.6%, to $2,616. metric tons.
Chief Market Analyst Kate Lehman said: At AvaTrade, the prices of soft commodities are currently falling as a result of:Looking at this week’s losers table, the top three financial instruments whose prices fell last week were all soft commodities. The fall in corn and wheat prices was due to the extension of the UN-brokered grain deal between Russia and Ukraine until July 18, which increased Ukraine’s grain supply and boosted global corn and wheat prices. Exports increased..
“Moreover, countries around the world are beginning to feel the effects of El Niño. This weather phenomenon is usually thought to bring increased rainfall to areas such as the United States and Canada, and as a result, corn and wheat production in both countries has actually benefited from the heavy rains brought by El Niño. As the two largest commodity exporters in the world, this has pushed prices down.
“As for sugar, prices fell due to increased sugar supply from Brazil, the world’s largest sugar producer and exporter. In May 2023-24, the country’s sugar production increased by 37.7% year-on-year, and the sugarcane crushing rate rose to 46.8% from 40.5% in May 2022, according to UNICA, Brazil’s sugarcane industry association. .
“Traders who currently hold these soft commodities appear to be looking to sell them now to avoid losses during a price crash. It does not mean that it will lead to