In a recent article published on cocoaradar.com Pam Thornton, an influential commodity trader at Nightingale Investment Management Limited, claimed that “It's not the futures markets that are broken, it's the physical market that is broken.”
Anthony Myers
She was referring to the chronic underinvestment in cocoa production throughout the supply chain and the lack of collaboration on forecasting and funding for scientific research into crop disease and production methods.
Tricia Brannigan, Hershey's vice president for procurement, (and one of cocoaradar.com’s most influential people of 2024) told Reuters earlier this month that she believes the New York cocoa futures market is currently disconnected from the reality of the global physical market due to exchange actions that have reduced liquidity and increased volatility.
"ICE is not providing an orderly market for buyers and sellers," she said, claiming that the cocoa futures market is no longer providing price transparency or helping companies to hedge risks.
Let’s not forget that in January, the US chocolate maker reportedly asked the Commodity Futures Trading Commission (CFTC) in New York to buy an amount of cocoa from ICE exchange stocks larger than the current threshold limits for traders.
At the time, just after Christmas, cocoa was trading considerably higher than today’s price, and the move by Hershey highlighted potential vulnerabilities in global commodity trading and emphasized the role of regulatory decisions in maintaining market stability.
Pam Thornton will speak at the WCF Partnership Meeting Plenary session on world cocoa economics on 19 March, while Tricia Brannigan will join the Fireside chat Industry Leaders: World cocoa business investments session on Thursday, 20 March.
Cocoa prices post moderate losses
On the markets this week, cocoa prices posted moderate losses, weighed down by a recovery in cocoa inventories.
Since falling to a 21-year low of 1,263,493 bags on 24 January, ICE-monitored cocoa inventories held in US ports have rebounded and climbed to a 3-1/4 month high of 1,530,893 bags on Monday, according to barchart.com.
Cocoa prices have been on the defensive over the past two weeks. Last Tuesday, they fell to 3 1/2-month lows on an improving supply outlook. Concern about slowing Cote d’Ivoire cocoa exports supports cocoa prices.
On the bearish side, Nigeria reported in February that its January cocoa exports jumped +27% year over year to 46,970 MT. Nigeria is the world's fifth-largest cocoa producer.
A market watcher, who wished to remain anonymous, told cocoaradar.com “Cocoa prices have dropped by 8% (vs w-1), now standing -18% lower than last month … and the Industry is believing rumours about big companies manipulating the market with bearish news.
“The market is consolidating seeking new support and resistance levels … but volatility remains due to lack of cashflow, low liquidity and crop concerns.”
- Registration for the WCF Partnership Meeting is still open. For the full agenda and event details, visit the WCF website.
Anthony Myers
cocoaradar.com is:
- Official Media Partner - World Cocoa Foundation Partnership Meeting in São Paulo, Brazil, 19-20 March 2025.
- Official Media Partner - Amsterdam Sustainable Cocoa Conference, Chocoa, 4-9 February 2025.
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