Research

Cocoa market update: Supplies subside

6 December 2023 18:45 RaboResearch

Cocoa futures have surged 60% on the New York contract and 75% on the London contract year-to-date (rolling second contracts). This rally is partly driven by...

Intro

    Disease, weather, and aging trees have impacted cocoa yields and resulted in supply-side issues that have led to a mammoth rally for cocoa futures. The global cocoa balance sheet is likely heading for its third-consecutive global deficit in the 2023/24 season. We anticipate global grindings to decline in 2024. However, with the current stocks-to-use ratio at an all-time low, the market will remain tight. Speculators will play a pivotal role in dictating price direction in 2024. At present, they are holding a large net long position on both London and New York.

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