-
Ivorian Intervention: Regulator CCC purchased ~200k tonnes from exporters, easing immediate logistics issues but signaling a potential future supply overhang.
-
Supply Outlook: Prices reversed from a one-month high amid improved long-term harvest prospects in Africa and Latin America (e.g., Ecuador potentially surpassing Ghana).
-
Technical Retreat: The price fell nearly 5% to test the $6,000 level after failing to sustain gains above the three-month moving average last week.
-
Ivorian Intervention: Regulator CCC purchased ~200k tonnes from exporters, easing immediate logistics issues but signaling a potential future supply overhang.
-
Supply Outlook: Prices reversed from a one-month high amid improved long-term harvest prospects in Africa and Latin America (e.g., Ecuador potentially surpassing Ghana).
-
Technical Retreat: The price fell nearly 5% to test the $6,000 level after failing to sustain gains above the three-month moving average last week.
The price of cocoa is experiencing a sharp pullback after a period of robust gains spanning late November and early December. This earlier rally was fuelled by renewed forecasts of a supply surplus for the entire previous season and persistent uncertainty surrounding current harvest levels. Furthermore, the current price is approximately half the level recorded in December 2024, when expectations for cocoa yields in African nations were highly pessimistic.
Currently, not only have the harvest prospects on the continent improved, but production outlooks in Latin American countries are also rapidly increasing. Ecuador could potentially become the world's second-largest cocoa producer as early as next year, displacing Ghana. The position of Côte d'Ivoire as the production leader, however, remains relatively secure. The latest data on cocoa deliveries in the current season show a "supply surplus" compared to the previous season for the first time. The weak deliveries at the beginning of this season were primarily due to transportation issues.
Equally significant at the start of this week is the news that the Government of Côte d'Ivoire has authorized the local regulator, Le Conseil du Café-Cacao (CCC), to purchase approximately 200,000 tonnes of cocoa from farmers. This intervention aims to rescue local exporters who, facing falling prices, threatened to default on forward contracts entered into at higher levels. The purchases are intended to unblock ports and mitigate a wave of bankruptcies among exporters, but the CCC will subsequently have to sell these beans on the international market, implying a potential future influx of supply. Currently, local exporters have ceased purchasing beans from farmers, as they hold previously acquired inventory which they now must sell cheaper on the international market than their original purchase price.
The commodity’s price is retreating today to the $6,000 level, after having tested the three-month moving average and a one-month high at the end of last week. The $5,750 per tonne area currently acts as a critical technical support level for prices.
It is also worth noting that the latest CFTC data, which remains slightly delayed (available for November 18th), showed that the number of non-commercial short positions exceeded long positions. This is the first time this has occurred since 2022, when it served as a strong contrarian signal. However, the total number of open positions was several times greater then than it is today.
US OPEN: Mild optimism at the start of the week
BREAKING: Mixed Inflation in Canada↔️USDCAD muted
Sanofi Under Pressure After FDA Delay and Failed Trials
Crypto news: Bitcoin slides below $90k again🚩Cryptocurrencies under pressure
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
