“New York Cocoa Prices Reach 12-Year High”

Cocoa Prices Surge to Record Highs Amid Restricted Supplies and Weather Concerns

The benchmark cocoa contract at the Intercontinental Exchange in New York surged to $3,429 per metric tonne during the trading session, marking the highest price since mid-March 2011. It later closed at $3,407, reflecting a significant increase of 1.4%.

The prices of cocoa, a key raw material for chocolate-making, have skyrocketed to the highest levels in over 12 years in New York and 46 years in London. This surge is primarily due to limited supplies as production in the western part of Africa, the primary source of cocoa for chocolate makers globally, experiences an unusual decline. Additionally, the prospect of potential negative weather patterns, particularly the El Nino development, adds to the concerns.

Ghana, Ivory Coast, Nigeria, and Cameroon, all situated in regions susceptible to drier-than-normal weather, may face challenges in cocoa production in the coming months due to the anticipated strength of the current El Nino. This weather phenomenon tends to weaken cocoa production.

As a result, the amount of cocoa arriving at ports for export in Ivory Coast, the top cocoa grower, has decreased by an estimated 4% compared to the previous year, indicating a decrease in production.

Analysts predict that the 2023/24 mid crop and the 2024/25 main crop could be affected by the weather conditions, further exacerbating the cocoa supply situation.

In response to these developments, cocoa futures in London settled up, reaching 2,532 pounds per metric tonne.

In the realm of other commodities, raw sugar witnessed a modest increase, settling at 23.86 cents per pound, still trading below the peak it reached in April.

Arabica coffee experienced a slight rise to $1.563 per pound, while robusta coffee settled at $2,532 per metric tonne, down 0.8%.

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