The cocoa market has been experiencing very strong growth since the beginning of this week, as concerns have been raised about the current harvest in Ivory Coast. Currently, the harvest is proceeding smoothly and shipments to ports are up to 30% higher than last year. However, recent quite a bit of rainfall in some areas of the country has led to mold growth in dried cocoa beans and some shipments are not being accepted by traders. In addition, drought and high temperatures in other areas are threatening cocoa trees ahead of the so-called mid-season, which begins in April. Nonetheless, the rains are now crucial from the perspective of the ongoing main season. Excessive amounts of these are causing supply problems and could lead to tree diseases and mold formation during the last key period of the main harvest in December. At the same time, we are seeing a further decline in cocoa stocks at New York ports (cocoa for futures delivery), which are now at their lowest since 2005.
Cocoa prices are up about 17% this week. The price is now at its highest since mid-October and is testing the area around $8200 per ton. The upward trend line was broken yesterday. The current rise appears to be speculative, but further problems in supply could lead to a breakout of resistance near $8400 per ton. Then the way will be opened to resistance near $10000. Cocoa was last at these levels in June.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.