Cocoa Futures Surge as Ghana Restricts Cocoa Supplies
Cocoa futures surged following Ghana’s announcement to limit certain supplies for the forthcoming season, amplifying concerns over sustained shortages.
The world’s second-largest cocoa producer has informed buyers that it will determine the proportion of the next crop sold as specialty cocoa based on overall production levels.
The Ghanaian cocoa regulator will equitably allocate beans among buyers, Bloomberg reported last week.
The most-active cocoa futures contract in New York advanced by as much as 6.4% on Monday, marking the largest intra-day gain in over a week.
Although prices have retreated from the record highs set in April—due in part to expectations of improved supplies next season—they remain approximately 90% higher this year following disappointing harvests in West Africa.
The move to restrict some sales indicates concerns that the forthcoming crop may not recover as robustly as anticipated, even with favorable weather conditions and timely deliveries of pesticides and fertilizers.
While a beneficial mix of sun and rain in West Africa is conducive to crop development, the cocoa markets are expected to “remain choppy until there are greater assurances on a recovery,” wrote consultant Judy Ganes in a report.
…with files from bloomberg.
