Rising Cocoa Futures Amid Concerns of Dry Weather
Cocoa futures are experiencing an uptick in New York, driven by worries over dry conditions in the key producing nations worldwide, as reported by Bloomberg.
The most actively traded contract has risen by 9.3%, positioning it for a weekly price increase of approximately 10%. Recent rainfall in certain regions of West Africa has been minimal, and predictions suggest that these dry conditions are likely to persist. Such weather patterns may hinder soil moisture levels, which are vital for crop development, according to Maxar’s forecasts.
Positive Outlook for Cocoa Production
Despite the concerns regarding adverse weather, analysts anticipate a rebound in cocoa production in West Africa during the season that begins in October. This recovery is expected to contribute to an increase in market surplus.
“While the market might receive some support this week from the trend of drought in West Africa, the outlook for the upcoming main harvest remains predominantly optimistic,” indicated experts from ADM Investor Services on Thursday.
Arabica Coffee Prices Decline
In contrast, Arabica coffee prices have fallen as traders continue to assess the risk of frost in Brazil, the largest producer, which had previously raised prices earlier in the week.
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