TLDR: NEW YORK—July ICE New York cocoa closed up 9.83% and July ICE London cocoa rose 10.24% as Ivory Coast flooding cut access to plantations and traders covered shorts.
Key Takeaways:
- Ivory Coast and Ghana supply more than half of the world’s cocoa, so weather disruptions quickly reshape global prices and shipping costs.
- Traders cited heavy rains and flooding in the Ivory Coast plus NOAA forecasts of an 82% chance of El Niño, with 67% for a Super El Niño.
- Bullish supply fears clash with bearish signals like ICE inventories at 2,745,277 bags, plus weaker North American and European grindings.
Cocoa markets are doing what they do best: pricing panic before the harvest even starts. Floods and El Niño chatter can move faster than contracts, but shrinking demand shows the squeeze is not one sided.
Cocoa markets are doing what they do best: pricing panic before the harvest even starts. Floods and El Niño chatter can move faster than contracts, but shrinking demand shows the squeeze is not one sided.
Q&A
If flooding keeps farmers away from plantations, what changes fastest: farm output or trader logistics?
Output loss hits later, but logistics can break immediately, delaying deliveries and raising costs for exporters and grinders.
Why does a weather model like NOAA El Niño matter to cocoa prices even before any crop is harvested?
Traders price probabilities, not certainty, and El Niño can signal rainfall and heat patterns months ahead that affect flowering and pod development.
How can chocolate company results look steady while cocoa demand stats still weaken?
Firms can manage volume through mix, pricing power, and inventory timing, while grindings and candy sales capture a different slice of consumption.
What would make ICE inventories stop rising despite bullish weather headlines?
Inventories fall when arrivals and shipments slow for longer than demand, so a sustained delivery disruption would need to outweigh continued grinding demand.
Could the Strait of Hormuz shipping disruption have lasting effects on cocoa beyond temporary cost spikes?
Yes, if higher insurance, fuel, and freight costs persist, importers may hold tighter stocks and renegotiate terms, tightening effective supply.
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