Cocoa Flash News: Cocoa Prices Continue to Rise

4 December 2024

The Atlante bulletin monitors global markets to highlight the most significant changes. Cocoa prices are experiencing a notable increase, driven by adverse weather conditions and external factors that continue to have a significant impact on the market.

Cocoa Price Surge: Causes and Global Market Impacts

The average prices of cocoa beans have risen by 43% since the beginning of November, reaching June levels again and surpassing 8,000 USD/t (see ICCO chart below). This increase is primarily attributed to worsening weather conditions in West Africa, crucial for the 2024/25 harvest, against a backdrop of the lowest stock levels since the 2001/02 season and demand continuing to outstrip supply.
Particularly concerning are the recent heavy rains in Côte d’Ivoire, which are reported to have slowed the ongoing main crop harvest and increased the risk of disease outbreaks that could compromise bean quality. Additionally, producers fear the early arrival of the dry Harmattan winds, typically expected between December and March, which could also impact the future mid-crop harvest anticipated from April.

In addition to supply-side uncertainties, the market is also supported by various exogenous factors, such as relatively high net long positions in financial markets, uncertainty surrounding the implementation of the EUDR and its potential impacts, as well as container costs that remain elevated due to geopolitical tensions in the Middle East. In the short to medium term, limited stocks, qualitative uncertainty about the 2024/25 harvest, and exogenous factors like those mentioned above are expected to continue providing support and adding volatility to prices.