The end of 2018 saw London cocoa prices rise by 30%, despite marked falls for other major commodities including metal and oil, Reuters has reported.
Phin Ziebell, senior economist at National Australia Bank, who covers agriculture, oil and gas markets, told Reuters: “[However] agriculture markets, cocoa and wheat, in particular have had a strong performance, which has been driven by fundamentals,” he said.
Those fundamentals helping cocoa recover from six-year lows include dry weather in the Cote d’Ivoire boosting speculative fund inflows, with supply now picking up as we head in 2019.
“The main crop harvest is continuing in West Africa. Conditions are hot and dry. Main crop production ideas for the Cote d’Ivoire and Ghana are being reduced, with the Cote d’Ivoire now estimating its main crop production at 1.985 million tons, down from previous estimates just over 2.0 million tons,” said Jack Scoville, senior softs analyst at Chicago’s Price Futures Group.