Benign weather and healthy consumers push cocoa to 4-year lows


Benchmark cocoa futures on the Intercontinental Exchange in New York hit $2,052 per metric ton on February 3, the lowest level since March 2013, in an extended year-long decline after 2015’s weather-related rally. Usd inr exchange rate today They closed at $2,052 per ton on Friday.

A bumper crop last season from benign weather in West Africa is weighing down prices.

Code c online Ivory Coast and Ghana are the world’s top producers of cocoa beans, accounting for more than two-thirds of global supply.

“The Harmattan season—marked by dry and dusty winds blowing from the Sahara—has been weak this season, and has so far not created much damage to cocoa crops,” said Singapore-based Phillip Futures soft commodities dealer, Wilfred Chong. Marketing future “Instead, weather conditions are seen to be improving, fuelling the selloff.”

In the largest cocoa producing country of Ivory Coast, beans are piling up at warehouses and ports as exporters who put in bids for the commodity at high prices are now stuck with stock they’re unwilling to sell at a loss, Reuters reported in January.

In the U.S., which is the world largest chocolate market, retail sales of chocolate candy have seen little growth in the last two years. Us stock market futures quotes Sales by volume increased by just 0.6 percent in 2016 while sales by value were up 0.7 percent to $13.7 billion in the year up to December 25, according to data from Chicago-based market research firm IRI.

Annual cocoa production is about 4 million tons and many traders are expecting a supply surplus this year. Usd to aud calculator The ICCO will release its projections for the current cocoa year later this month.

In China, retail volumes of chocolate likely fell 4 percent to 122,000 tons in 2016. Usd to gbp conversion rate Market research firm Euromonitor attributed this decline to a growing awareness about health, a slowdown in discretionary spending, and only marginal product innovation.

“New product development in chocolate was limited in 2016 compared to other snack foods, such as nuts, as many leading confectionery manufacturers have cut their budgets for product innovation. Rmb to usd exchange rate This lead to a slowdown in demand, as consumers are typically drawn to novel line extensions,” wrote Euromonitor analysts.

Survey results released in late-January from the inter-government International Cocoa Organization showed almost unchanged global stock level as of September 30—a signal that there was little drawdown—spooking the market, which had been expecting a production deficit in the 2015-2016 marketing year.

On January 25, largest global cocoa processor Barry Callebaut AG said its overall sales volumes were flat in its fiscal first quarter although revenue rose 4.2 percent on the year as higher-margin products. Market value of futures contract The Swiss company posted a 14.3 percent rise in sales volume in the gourmet and specialty sector for the quarter.

“There may be a rising number of health conscious individuals but there is also a growing popularity over health benefits of cacao and cocoa. Stock market in the future Such trends take a much longer period to make a significant difference,” he said.