The global cocoa market faces turbulence with an outflow of funds and high volatility

Published 2024년 12월 20일

Tridge summary

The global cocoa market is experiencing instability and record volatility, with prices yet to find a balance between supply and demand. The withdrawal of hedge funds from the futures market due to high trading costs and reduced profits has led to a decrease in market liquidity, further exacerbating price volatility. This volatility is expected to persist into 2024, especially with the holiday season. The situation is causing challenges for chocolate manufacturers and increasing costs for consumers.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

By: Claudemir Zafalon The global cocoa market, which directly influences the price of confectionery products such as chocolate bars and hot chocolate, continues to experience a period of instability and record volatility. After a recent technical correction, the price of the commodity has shown that it has not yet risen enough to balance supply and demand, maintaining pressure on the sector. One of the main changes in the cocoa scenario this year was the withdrawal of hedge funds from the futures market. These funds, which traditionally bet on price fluctuations to profit and help increase market liquidity, began to abandon trading futures contracts in mid-2023. The reason? Intense price fluctuations, driven by supply problems in West Africa, increased trading costs and reduced profits. The situation was aggravated in the first half of 2024, when cocoa prices reached record highs in April, pushing margins on the London and New York exchanges to unsustainable levels for many ...

Source: Mercado Do Cacau