Cocoa Prices Surge Following Inclusion in Commodity Index
Cocoa Price Rally: Cocoa prices surged on Friday due to the announcement that cocoa will be included in the Bloomberg Commodity Index for the first time in 20 years, potentially leading to significant inflows from passive funds.
Supply and Demand Dynamics: While cocoa prices are supported by shrinking inventories and optimistic harvest reports from West Africa, weak global demand and disappointing sales figures for chocolate, particularly in North America, are exerting downward pressure on prices.
Production Trends: Cocoa production in Nigeria is projected to decline, while Ghana has seen a significant increase in cocoa deliveries, contributing to price fluctuations in the market.
Global Cocoa Deficit: The International Cocoa Organization has reported a substantial global cocoa deficit for the 2023/24 season, the largest in over 60 years, but anticipates a surplus for the following year, indicating a potential recovery in production.
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