Global: Cocoa prices collapsed after hitting record highs the day before

Published 2024년 5월 3일

Tridge summary

Cocoa prices have seen a significant drop, extending a weekly slide of nearly 30%, with the most active contract falling 7.6% to $6,990 a metric ton. This marks the biggest weekly drop since 1959, following a record high of nearly $12,000 a tonne just two weeks ago. The price surge was due to a severe supply shortage caused by a crop failure in West Africa, a situation that has led to cocoa shortages for the third year in a row. However, the recent drop is attributed to an outflow of traders, resulting in a drain on liquidity and extreme price swings. The financial crisis is now impacting the physical market, with traders delaying purchases from leading manufacturers due to the need to hedge their positions and the increased volatility.

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

Original content

Cocoa prices are falling sharply, extending a weekly slide of nearly 30%, as the market ends one of the liveliest stretches it has ever seen. This is reported by the Bloomberg agency. Cocoa fell 7.6% to $6,990 a metric ton, but then pared losses to trade 0.9% higher. The price is still on track for a 28% weekly drop, the biggest drop since 1959. Just two weeks ago, the most active contract hit a record high of nearly $12,000 a tonne as the industry grappled with the effects of a severe supply shortage. But the futures fell to $6,990 this week - about 40% below an all-time high - and have seen extreme price swings after an outflow of traders led to a drain on liquidity. This pullback marked a sharp reversal for cocoa, which became more expensive than copper. Prices have skyrocketed as a crop failure in West Africa has left the world facing a third year of cocoa shortages, stressing buyers and driving up chocolate prices. But the frenzied hype also made it more expensive for traders ...

Source: Epravda