Cocoa prices have risen sharply on the New York Stock Exchange, mainly due to technical factors, following a 3.5% drop the previous day. The December contracts surged by 5.42% on Tuesday, July 30, reaching US$ 7,074 per ton.

Volatility Amid Harvest Expectations

Market analyst Adilson Reis notes that reports indicate a good cocoa harvest in West Africa, a region responsible for about 70% of global production. However, until this scenario is confirmed, volatility is expected to persist. Reis explains, "Even with this favorable expectation, the market is wary because there is still a lot of uncertainty regarding availability for the 2024/25 harvest. This favors strong price fluctuations."

Off-Season Impact and Price Projections

Reis also highlights that the off-season period typically supports upward movements in cocoa prices. The market is currently driven by deficit projections for the 2023/24 cycle, which runs until September. He predicts that futures contracts will range between US$ 7,400 and US$ 8,400 per ton.

"The market has stabilized in this price range until the issue of the harvest in West Africa is resolved. Ghana, the second-largest cocoa producer, faces significant challenges with 31% of its cocoa trees infested with swollen bud disease, potentially causing new supply problems," Reis points out.

Challenges in Ghana's Cocoa Production

Ghana has experienced climate-related production impacts over the past two years. Although the country has previously exceeded 1.5 million tons in production, it is projected to produce only 470,000 tons this year. This shortfall, along with the infestation issues, adds to the market's uncertainty.

Brazilian Government Extends Cocoa Disease Emergency

In other news, the Brazilian government has extended the phytosanitary emergency period for another year due to the imminent risk of cocoa moniliasis (Moniliophthora roreri) in the states of Acre, Amazonas, and Rondônia. This measure will remain in effect until August 2025, as announced by the Ministry of Agriculture.

These developments highlight the complex dynamics affecting the global cocoa market. As uncertainties persist, stakeholders must stay informed and adapt to the evolving conditions.