![Cocoa Futures Set to Reach Highest Settlement in Over 46 Years](https://www.forexbrokersreview.org/img/e9911c20-6993-4005-9faf-48b5ca3ddba4/news-article-14.jpeg?fm=jpg&q=80&fit=max&crop=1920%2C1080%2C0%2C0&w=810)
Cocoa futures continued their upward trend for the sixth consecutive session on Friday, positioning prices to achieve their highest settlement in more than four and a half decades.
According to Jack Scoville, vice president of The Price Futures Group, the availability of cocoa from West Africa remains limited, and projections indicate another production deficit against growing demand in the coming year.
Traders are increasingly concerned about the potential for another short production year, exacerbated by the threat of El Niño and its hot and dry weather conditions in West Africa.
In Friday's trading, the most-active March contract (CCH24, +0.77% CC00, +0.77%) for cocoa futures rose by $45 or 0.9%, reaching $5,001 per metric ton on the ICE Futures U.S. exchange. This puts cocoa prices on track to settle at their highest level in more than 46 years.
The previous day's settlement saw prices reach $4,956, representing the highest finish for a most-active contract since July 20, 1977. In January, cocoa futures recorded a significant 15% increase, marking its best monthly gain since November 2020.
Analysts at Commerzbank expressed concerns about the impact of dry weather intensified by Harmattan winds on the mid-crop harvest in West Africa, which is scheduled to begin in April. Harmattan refers to a cool dry wind blowing from the northeast or east in the Western Sahara.
The analysts highlighted that the cocoa harvest is already significantly behind last year's level, with port arrivals in Ivory Coast, the largest cocoa-producing country, being 35% lower from October to January compared to the same period in the previous year.
Consequently, there is a likelihood of another supply deficit in the cocoa market for the 2023/2024 crop year, marking the third consecutive year of deficit, as per the Commerzbank analysts.
Post a comment