Source: Zhitong Finance
Cocoa futures rose as high as 5.4% on Wednesday, and are expected to rise more than 19% for two consecutive days, reversing last week's sharp decline from recent all-time highs.
Cocoa prices rose in the New York market, the biggest increase since 1999, as markets plagued by severe shortages continued to fluctuate.
Cocoa futures rose as high as 5.4% on Wednesday, and are expected to rise more than 19% for two consecutive days, reversing last week's sharp decline from recent all-time highs. Cocoa prices have soared this year, triggering additional margin requirements, prompting traders to withdraw from their positions and running out of liquidity.
On the supply side, while recent rainfall in West Africa has eased concerns about mid-season crops, farmers are worried about damage from previous high temperatures, according to the Hightower report. Poor harvests in this critical region have left the world facing yet another annual deficit. Cocoa stocks in US ports have also been declining and are currently at a 3-year low.
The market is also keeping a close eye on supplies from West Africa, which have been delayed due to a setback in the harvest. The largest producer, Côte d'Ivoire, said it could reimburse exporters for extended contracts, but not the full tonnage the shipper was seeking, according to reports on Tuesday. Due to shortages, shippers were required to sign contracts in advance, but after control prices were raised in Côte d'Ivoire, shippers did not want to pay more for coffee beans.