Cocoa price starts December with an increase

The cocoa price has risen again after last week's low. This is partly due to better demand, but a new report from the International Cocoa Organization (ICCO) is also contributing to higher prices. The cocoa price has made an upward move after the record low at the end of November and beginning of December. In London, the cocoa price converted amounted to $4,809.24 per ton. On Tuesday, December 2, the price rose to $5,135.39. That is an increase of 7%. In recent weeks, the price of cocoa faced pressure after a roughly two-year period of enormous price increases. Due to the high prices of end products, demand for cocoa has increasingly come under pressure in recent years. Additionally, improved forecasts are further putting pressure on cocoa prices. Like in the past weeks, all signals point to a favorable harvest in Côte d'Ivoire: the weather is cooperating, the cocoa fruits are developing well, and growers expect a significantly stronger yield in the upcoming season. A significant reason for the increase is that Christmas is approaching. With the holiday on the horizon, the demand for cocoa for the production of baked goods and desserts increases. Especially in the United States, the demand for cocoa is strong at this time of year. Incidentally, this is not only due to the holidays but also seasonally driven: in winter, the demand for sweets is always greater. In the United States, the effects of this are stronger, as it is more common for such products to be part of the staple diet. In Europe, on the other hand, sweets are more likely seen as snacks than, for example, breakfast, leading consumers to forgo these products when prices rise. Shortages Additionally, a new confirmation of the ongoing tightness has led to higher prices. The International Cocoa Organization (ICCO) reports that the cocoa season 2023/24 has ended with a significant shortfall of 489,000 tons, while a surplus of 49,000 tons is expected for 2024/25. At the same time, the latest figures once again show that cocoa processing is still under pressure on a global scale. The grindings are estimated at 4.81 million tons in 2023/24 and 4.60 million tons in 2024/25, a decline attributed to high input costs and decreasing margins for processors. These costs weigh on the profitability of the industry and limit room for growth, despite the improved prospects on the production side.