Cocoa futures declined for the third consecutive day amid forecasts of rain in West Africa, reversing a weeklong rally driven by worries about dry conditions in major producers Ivory Coast and Ghana.
Maxar weather reports indicated that Western Ivory Coast experienced moderate to heavy rainfall on Wednesday, with light, scattered showers occurring in other areas.
“Ivory Coast growers expect harvest to begin next month, and the amount of rain the crop receives will determine the amount and duration of the harvest,” said Mark Bowman, senior global market analyst at ADM Investor Services.
“Producers would like to see more rainfall in the south, but that may take another week, which could leave southern regions stressed,” he cautioned.
The most actively traded cocoa contract dropped by up to 2.4% in New York and is on track for a 2.7% decrease for the week.
Despite this, cocoa futures have risen by more than 80% this year, largely due to concerns about dry weather, disease, and insufficient fertilizers affecting production in major growing areas. Recently, Ghana’s industry regulator reduced the country’s 2024-25 crop harvest target by 20% due to weather-related issues.