Cocoa prices rose recently in mid-April before easing in late April, as stronger processing data and weather concerns were later offset by higher inventories and softer chocolate demand.
Prices gained in mid-April after Asian cocoa grindings for the first quarter rose by more than five percent from a year earlier. The increase raised hopes that demand was beginning to recover, prompting traders to cover short positions in futures markets and giving prices additional support.
A weaker US dollar also helped lift cocoa during the period. Since cocoa is traded globally in dollars, the softer currency made purchases more attractive for buyers using other currencies and supported higher commodity prices.
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Supply concerns added to the upward move. Persistent drought in Ivory Coast and Ghana, the world’s key cocoa-growing region, raised worries over mid-crop yields. The dry weather increased concern that bean availability could tighten further, helping sellers maintain stronger offers.
Logistics costs also supported the market. Higher shipping expenses and fertilizer supply disruptions linked to recent Strait of Hormuz tensions raised costs for importers, adding a transport and input-cost premium to cocoa prices.
The rally weakened recently in late April as supply signals improved. ICE-monitored cocoa inventories climbed to a 20-month high, easing immediate availability concerns. Ivory Coast port arrivals also remained steady compared with a year earlier, limiting fears of a sharper near-term shortage.
Demand indicators turned weaker at the same time. Easter chocolate sales fell by about five percent from the previous year, and cumulative seasonal grindings remained below year-ago levels. Those signals reduced confidence in sustained demand recovery and pushed cocoa prices lower.
The recent April movement showed that cocoa prices remained highly sensitive to shifts in processing demand, West African weather and inventory data. Mid-April gains came from stronger Asian grindings, drought concerns and costlier logistics, but late-April losses followed rising exchange stocks and weaker chocolate consumption.
Senior Lead Analyst
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