Cocoa fell in price because it became too expensive
18 July 2025 16:51
Cocoa prices have rebounded from an eight-month low, but remain under pressure due to a paradoxical situation: the commodity has fallen in price precisely because of its high cost, which has forced consumers to cut back on purchases. This is reported by "Komersant Ukrainian" with reference to Bloomberg.
The sharp rise in cocoa prices in the previous months has created a paradoxical situation in the market: historically high prices have led to a significant reduction in demand from processing companies that could not withstand the increase in production costs. This has had the opposite effect – lower prices due to falling consumption, although the underlying problems with the availability of cocoa beans remain unresolved.
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Exchange dynamics
The most active contract in New York rose by up to 5.8%, reaching $7,735 per ton, which reduced the weekly decline to about 7%. Futures were under pressure during the week as the market assessed the extent of the destruction of demand after historically high cocoa prices.
On Thursday, grinding volumes in Europe and Asia fell by 7.2% and 16%, respectively. Grinding in North America fared better, down only 2.8% in the second quarter, highlighting regional disparities in demand, said Tracy Allen, agricultural commodities strategist at JPMorgan Chase & Co.
The sharp drop in cocoa prices this year – futures are down about 35% – has given buyers the opportunity to secure forward cover at the lowest levels in eight months, Allen added.
“The continuing decline in grinds reflects the historic increase in the cost of doing business and the reduced availability of cocoa beans, which has weakened industrial demand. We continue to caution that cocoa prices will remain structurally higher for a long time due to limited availability for several seasons,”
– she wrote in a research note.
The bank reaffirmed its medium-term price forecast of $6,000 per tonne as the market finds balance.
Cocoa futures rose 4.4% to $7,633 a ton in New York. London cocoa prices rose by 2.3%.
The price of robusta coffee fell by 0.8% in London.
Читайте нас у Telegram: головні новини коротко
