Ivory Coast: Profit taking and climate impacts drive the market

By: Claudemir Zafalon On this day before Christmas, the cocoa market is experiencing a period of liquidation of long positions and profit-taking, resulting in large price swings with low contract volume. Open interest has been falling daily, signaling a pullback by investors and increasing volatility in the sector. Meanwhile, in Ivory Coast, the world's largest cocoa producer, farmers are facing severe weather challenges. The Harmattan wind, typical of the season, has been blowing strongly since last week, raising concerns about its impact on production. This dry and hot wind, coming from the Sahara Desert, combined with below-average rainfall in some regions, threatens to dry out the soil and damage cocoa pods. Affected Regions and Expectations In the regions of Daloa, Yamoussoukro and Bongouanou, the lack of rain and strong winds have caused concern among farmers. If the weather continues to be dry in the coming weeks, cocoa trees could suffer significant weakening, compromising ...