Cocoa futures will soon be reacting to the International Cocoa Organization’s warning of Ghana’s cocoa plantations “in dire need of rainfall.” Cocoa futures are down 24 points today currently trading at $3,035 per ton at the Coffee, Sugar, Cocoa Exchange in New York.
The West African nation’s sustained dryness reportedly threatens both cocoa production and quality in the Ivory Coast as well. The dry hot winds coming from the Sahara desert – called the “Harmattan” – has a reputation for hurting cocoa yields, but the ICCO warns that this one is different and is said “to be the worst in three decades.”
The International Cocoa Organization, a global organization composed of both cocoa producing and cocoa consuming countries with a membership located in London, shared their fundamental view of the cocoa futures market by stating, “Extreme weather conditions, resulting from the severe Harmattan winds within the West African region, combined with the impact of El Niño, have negatively affected the 2015-16 harvests.” The ICCO adds, “In Ghana cocoa farmers are reported to be in dire need of rainfall for the vital development of the mid-crop.”
Cocoa futures trend is at a crossroad from being “down.” In my studies, if cocoa futures were to rally up to the 3080 level, then that can alter the trend to back up with resistance all the way up to 3475.
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