Cocoa prices fall, weather conditions improve

(Boursier.com) — Cocoa prices have been falling for several days, after their recent surge. They are on track to sign their longest series of losses in two years in New York, with a sixth session in the red this Thursday. Prices fell more than 2% to $7,797, in the wake of mild weather conditions, which could help the crops of crucial producers in West Africa. Crops will continue to grow thanks to “more showers and favorable soil moisture,” according to forecaster Maxar Technologies.

Poor harvests have fueled a global crisis and sent cocoa to a record high above $11,000 a tonne this year. But if the pressure falls on prices, the market remains volatile due to a lack of liquidity, with prices recording sharp fluctuations this week.

Volatility

Nothing is gained for cocoa producers and concerns about shortages persist. Pierre Andurand, a fund manager best known for his oil bets and who bet on cocoa before its massive surge, still thinks prices will remain high.

Andurand Capital Management remains “very confident” in its “long cocoa thesis,” noting tight supplies and stronger-than-expected demand, according to a letter to investors seen by Bloomberg.