Cocoa futures see increase as Ghana wants to ban several supplies
Date
7/24/2024 4:19:19 AM
(MENAFN) Cocoa futures experienced a notable increase on Monday as concerns over potential supply shortages were heightened by Ghana’s new plan to manage its cocoa exports. As the world's second-largest cocoa producer, Ghana has announced that it will regulate how much of the upcoming cocoa crop can be sold as specialty cocoa based on the total production volume. The regulatory body will also allocate beans "equitably" among buyers, according to Bloomberg's recent report. This measure has led to renewed apprehension about the stability of cocoa supplies, pushing futures prices up by as much as 6.4 percent in New York, marking the largest intra-day gain in over a week.
Despite prices having softened from the peak reached in April—largely due to expectations of improved supply conditions—cocoa futures remain approximately 90 percent higher for the year. This surge is a consequence of earlier poor harvests in West Africa, which have created a significant supply deficit. The new restrictions from Ghana suggest concerns that the forthcoming crop may not recover as much as anticipated, even if favorable weather conditions and timely agricultural inputs like pesticides and fertilizers are in place.
The prevailing weather conditions in West Africa, characterized by a favorable mix of sun and rain, generally support positive crop development. However, according to consultant Judy Ganes, cocoa markets are expected to remain volatile until there is more certainty about the extent of the crop recovery. The uncertainty surrounding Ghana's supply management and the overall crop outlook continues to influence market dynamics, contributing to ongoing fluctuations in cocoa prices.
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