Cocoa Prices Surge on Index Fund Expectations
Update: 2025-12-23
Description
Cocoa prices surged on Tuesday, with March New York futures up 1.21% and March London cocoa up 0.8%. This bullish trend is expected to continue due to index fund buying after cocoas inclusion in the Bloomberg Commodity Index in January, potentially bringing in $2 billion in New York cocoa futures purchases. US port inventories dropped to a 9.5-month low, adding to the positive outlook. However, bearish pressures persist from steady cocoa arrivals in Ivory Coast, the top producer, and weakening demand in Europe and Asia. The International Cocoa Organization and Rabobank have trimmed production estimates, while Nigeria, the fifth-biggest producer, anticipates an 11% output drop. Despite these factors, a one-year delay on EU deforestation rules keeps cocoa flowing freely, keeping prices volatile as traders monitor weather, stocks, and demand for the next moves.
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