Sharp price fluctuations in the cocoa market
Sharp price fluctuations in the cocoa market are associated with a lack of liquidity, new regulations, and market speculation. This week, cocoa prices fell by 28%, dropping to $6990 per ton on Friday, continuing the decline from the record level. Bloomberg reports this.
Futures are finishing one of the most volatile periods the market has ever seen. Just two weeks ago, prices rose to nearly record highs of $12,000 per ton due to a serious supply shortage in the industry. However, this week’s decline has led futures to fall by about 40% from the historical peak, accompanied by sharp price fluctuations after traders withdrew, undermining liquidity.
The decline marks a sharp turnaround in cocoa prices, which have become more expensive than copper. Prices have been on the rise due to poor harvests in West Africa, where the world has been facing a deficit for the third year, causing stress for buyers and making chocolate more expensive.
«It is important to note that the recent decline in cocoa prices is primarily the result of trading maneuvers, not a change in fundamental market indicators,» analysts at the BMI Fitch Solutions unit said, adding that they expect volatility to be maintained.
Other commodity market movements
As for other commodities, robusta futures in London fell to the lowest level in a month on Friday, while signs of increasing inventories have reduced concerns about supplies.
