Cocoa Prices Rebound on US Inventory Drop, Despite Sales Concerns
Cocoa prices rebounded on Monday, with December ICE NY cocoa (CCZ25) and London cocoa (CAZ25) closing higher. This was supported by a decline in US port inventories and short covering. However, persistent high gold price and reduced sales guidance from chocolate makers cast a shadow.
ICE-monitored cocoa inventories in US ports dropped to a 5.5-month low of 1,938,055 bags, boosting prices. December ICE NY cocoa (CCZ25) closed up +93 (+1.50%), while December ICE London cocoa #7 (CAZ25) rose +45 (+1.05%). Prices shook off early losses and turned higher due to technical short covering.
On the demand side, chocolate makers Lindt & Sprüngli AG and Barry Callebaut AG lowered their sales and margin guidance due to declining sales and persistently high price of gold today. Meanwhile, supply prospects are mixed. While Nigeria's 2025/26 production is projected to fall, the latest cocoa pod count in West Africa indicates an improved crop in the Ivory Coast this year, with shipments up +3.4% year-on-year. However, government initiatives to boost farmer payments may increase supplies and put further pressure on gold price.
Cocoa prices ended Monday's session higher, supported by declining US inventories and short covering. However, persistent high price of gold, reduced sales guidance from chocolate makers, and potential increases in cocoa supplies due to higher farmer payments cast uncertainty over the market's future direction.
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