Cocoa prices to remain ‘bullish’ as new decade gets underway

By Anthony Myers

- Last updated on GMT

Cocoa prices could rise in the new decade. Pic: Cargill
Cocoa prices could rise in the new decade. Pic: Cargill

Related tags commodities Cocoa

Seasonal winds in West Africa and reduced output from Ghana should see prices for cocoa rise, analysts predict.

The long-term prospects for the price of cocoa continue to look bullish as we head into a new decade, analyst Andrew Hecht said in his latest Hecht Commodity Report​.

Despite cocoa prices ending on a negative note at the end of 2019, the price of cocoa was higher in the fourth quarter and compared to its closing price on December 31, 2018. Cocoa rose 4.01% in Q4 and 5.13% in 2019, he said.

Data analysts​ said cocoa prices retreated Monday this week with London cocoa falling to a one-week low due to ample cocoa supplies.

Cocoa arrivals at Cote de Ivoire ports (the world’s largest grower) reached 1,153,000 tons between October 1 and January 5, 2020, exporters estimated, up 3.6% from 1,113,000 tons in the same period last season.

Cocoa prices were also undercut by the Ghana Cocoa Board's report on Monday that it purchased 496,217 MT of cocoa from farmers during Oct 1- Dec 26, up +8.9% y/y.

ICCO Daily Prices of Cocoa Beans

Daily Prices

06 Jan 2020

03 Jan 2020

ICCO daily price (SDRs/tonne)



ICCO daily price (US$/tonne)



London futures (£ sterling/tonne)



New York futures (US$/tonne)



Another supportive factor for cocoa prices is the start of seasonal Harmattan winds that have reduced beneficial rain in West Africa and may curb Côte d'Ivoire and Ghana cocoa yields.

Harmattan winds sweep in sand from the Sahara and can ravage cocoa pods and sap soil moisture, damaging bean size.

Satellite imagery from the US Climate Prediction Center from December 29 to January 4 showed little or no rainfall across most of the Côte d'Ivoire and Ghana, Reuters reported.

A Barchart analyst said the longer-term outlook for reduced cocoa supply from Ghana, the world's second-largest cocoa producer, is supportive for cocoa prices. "The Ghana Cocoa Board on September 13 cut its Ghana 2019/20 cocoa production estimate to a three-year low of 800,000 MT from a previous estimate of 950,000 due to an outbreak of the swollen shoot cocoa disease that has affected about 16% of the country’s cocoa crop​."

Hecht said that as we head into 2020, technical support stands at $2089 per ton, the mid-August 2019 low. “On the upside, $2783 is the first level to watch, and $2914 will stand as the next target during a rally. Above there, $3000 per ton is a psychological level in the cocoa market. The 2016 high was at $3237, and the 2015 peak of $3422 is the next technical target. The ultimate goal for the cocoa market on the upside stands at the 2011 record high of $3826 per ton​.

A price above the $4000 level is not out of the question during a supply shortage, given the low level of price elasticity when it comes to the demand for chocolate. The bottom line is that demand is not likely to decline all that much during periods when shortages force the price of cocoa beans appreciably higher, given the ever-rising demand for chocolate in the world,​” he said.

Related topics Commodities Cocoa & Sugar

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