LONDON: World cocoa prices plunged nearly 10percent on Wednesday to hit fresh 2-1/2-year lows amid talk that a growing buildup of unsold stocks in top grower Ivory Coast is worsening. Dealers cited rumours that cocoa warehouses in Ivory Coast are overflowing with beans, and that queues of trucks cannot be unloaded because far too little of the chocolate ingredient is being exported.
“(Industrial buyers are) gradually re-entering the market, but (they) cannot provide sufficient support,” said a dealer.
London cocoa futures on the ICE exchange, used as a benchmark to price cocoa around the world, plunged to their lowest since mid-2023 at 2,234 pounds a metric ton earlier in the session, and were down 6.7percent at 2,309 pounds/t at 1442 GMT. New York cocoa futures hit their lowest since mid-2023 at USD3,189 a ton, before recovering to USD3,265/t, still down 5.8percent.
Ivory Coast is considering cutting the guaranteed price paid to cocoa farmers, sources told Reuters, although the country’s cocoa regulator said this week it would keep the price unchanged until the end of the main crop on March 30.
Ghana, the world’s second-largest cocoa grower, last week slashed its guaranteed farmer price by a third in a bid to reboot sales and get cash to farmers who say they have not been paid since November. Rabobank said the market is “devoid of a near-term bullish catalyst,” noting that ICE exchange stocks are rising while the weather in West Africa remains favourable, boding well for the crop.
In other soft commodities, arabica coffee slipped 0.3 percent to USD2.8685 per pound, having settled down 5.1percent on Tuesday, while robusta coffee was up 1.2percent at USD3,661 a ton, having lost 4.6 percent at Tuesday’s close.
Raw sugar rose 1.1percent to 14.01 cents per lb, extending its rebound from last week’s five-year low, while white sugar was up 0.5percent at USD404.60 a ton.
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