Onome Amuge
Cocoa futures rose on Thursday, recovering from a one‑month low in the previous session, as expectations of index‑related buying and supply concerns underpinned the market. March ICE New York cocoa rose 2.74 per cent, closing up 162 points, while March ICE London cocoa gained 2.56 per cent, or 109 points, to reach one‑week highs.
Analysts pointed to the upcoming annual rebalancing of commodity indexes as a key driver. Peak Trading Research estimates that the exercise could trigger purchases of roughly 37,000 cocoa futures contracts over the next week, representing nearly 31 per cent of aggregate open interest.
Thursday’s rally contrasted with Wednesday’s decline, which had sent cocoa prices to one‑month lows on expectations of a strong West African harvest. Tropical General Investments Group reported that growing conditions in Ivory Coast and Ghana have been favourable, with farmers noting larger and healthier pods compared with last year. Chocolate manufacturer Mondelez said its latest pod counts in West Africa were 7 per cent above the five‑year average and materially higher than the previous crop, reinforcing expectations of a robust main harvest.
Despite favourable growing conditions, prices found support from lower-than-anticipated exports from Ivory Coast, the world’s largest cocoa producer. Data released on Monday showed that farmers had shipped 1.073 million metric tonnes of cocoa to ports in the current marketing year through 4 January, down 3.3 per cent from 1.11 million tonnes during the same period last year.
Inventory dynamics also contributed to price strength. ICE‑monitored cocoa stocks held at US ports fell to a 9.75‑month low of 1,626,105 bags on 26 December, before recovering modestly to 1,658,056 bags, a 3.5‑week high, by Thursday.
The combination of fundamental supply from West Africa and structural buying pressures from commodity indexes created a volatile market backdrop. Traders are weighing the implications of ample harvests against the potential for sustained institutional demand, as cocoa futures are newly added to prominent benchmarks.
