From a technical perspective, cocoa futures experienced a classic parabolic price advance followed by increased volatility and a partial retracement. The market’s dramatic rise broke through multiple resistance levels without establishing significant support on the way up, creating conditions for potential instability.
While cocoa prices have receded by close to 30% from their peak, they remain significantly elevated.
Fundamental analysts suggest that prices may stabilise around $6,000.00 per metric ton in the medium term, provided that production in West Africa recovers and market conditions improve. However, ongoing climate challenges and market uncertainties could continue to impact the cocoa industry and global chocolate markets.
Technical analysts have spotted that the March-to-April lows around $7,700.00 per metric ton where made close to the mid-August and mid-October 2024 highs which acted as support.
A fall through the early April low at around $7,650.00 per metric ton could lead to the May-to-October 2024 lows at $6,584.00-to-$6,117.00 being revisited whereas a rise above the late December, early February lows and early and late April highs at $9,442.00-to-$9,467.00 may lead to the June 2014 peak at 10,356 being revisited.
