Cocoa farmers continue to face difficulties as global demand weakens and the conflict between Russia and Ukraine limits exports of fertilizers. Cocoa prices have dropped moderately in recent weeks, with both NY and London cocoa posting 2-week and 1-month lows, respectively.
According to the European Cocoa Association, Q4 cocoa grindings in Europe fell by 1.7% year-over-year, and the Cocoa Association of Asia reported a similar decline of 0.2% for Q4 in Asia. These weak demand figures have further weighed down already-deflated cocoa prices.
Adding to the pressure on prices, Ivory Coast farmers have sent a cumulative 1.45 million metric tons of cocoa to ports for the 2022/23 marketing year, indicating ample supplies. However, prices received a brief boost last Monday as NY cocoa rallied to an 11-month high, driven by concerns that the seasonal Harmattan winds could lead to excessive dryness.
Despite these challenges, the quarterly report from the International Cocoa Organization (ICCO) on December 1 offered some optimism for the industry. ICCO reported that global cocoa production fell by 6.8% year-over-year, potentially signaling a recovery in prices in the coming months. Nevertheless, the ongoing difficulties with fertilizer and global demand will continue to affect the industry and farmers in the meantime.