ICCO: Cocoa Market February Report

By: Alexis Rubinstein, Managing Editor - Coffee Network

Mon, 21 Mar 2022, 14:22

ICCO: Cocoa Market February Report

Alexis Rubinstein

Managing Editor

CocoaNetwork (New York) – The International Cocoa Organization (ICCO) has issued its February market report.

RUSSIA – UKRAINE CONFLICT: THE GLOBAL COCOA MARKET AND FACTORS TO WATCH OUT FOR
The Russian Federation and Ukraine play an integral part in the global economy as both are major exporters of commodities (crude oil, natural gas, different metal ores, etc.) as well as being important actors within the global agricultural sector (wheat, fertilizers, edible oil etc). The halt or even a reduction in the exports of one of these commodities will fuel inflation on a global scale which will add up to the inflation resulting from the supply chain disruptions still caused by the COVID-19 pandemic. Nevertheless, at this junction, it is difficult to evaluate the economic and financial impact of the conflict. It is unknown how long it will last; when the current sanctions will be lifted; and whether other sanctions will be imposed. These tragic events and their global economic spill-over effects will also have an impact on the world cocoa market.

Major cocoa processors and chocolate brands have operations in these countries. In the midst of this military drama, it is difficult to envisage the impact on the operation of facilities, potential damage and of course safety of personnel of these companies. The charts in the Annex depict the trade flow of cocoa beans and products for Russia and Ukraine during the 2020/21 season. The importation of cocoa beans and cocoa semi-finished products to Ukraine (40,000 tonnes in cocoa beans equivalent in 2020/21) and to the Russian Federation (165,000 tonnes in cocoa beans equivalent) are expected to decline in the rest of 2021/22 season for a number of reasons. In Ukraine, the conflict is affecting the safety of any economic activity. In addition to this, the disruption of the power supply and various logistical problems make any manufacturing process even more challenging. In the Russian Federation, the depreciation of the rouble on the one hand, and the sanctions applied to some part of the Russian banking system on the other hand could reduce the demand for cocoa, as the payment of import contracts would be difficult; and create big uncertainties for cocoa processors and chocolate manufacturing companies.

RISK TO COCOA PRODUCTION
The significance of fertilizer as an essential input for cocoa production cannot be ruled out. Most cocoa trees in producing countries are old and the soil nutrients for many cocoa farms are depleted so the dependency on fertilizer for crop development is a requirement. However, in recent years, fertilizer prices have soared and likely to further increase due to the ongoing Russia-Ukraine conflict. The Russian Federation is a major global supplier of fertilizers. Indeed,

Russia is a primary producer of the main fertilizer nutrients – nitrogen, phosphate and potassium. Trade disruption in Russia could affect global fertilizer availability and consequently global agriculture including cocoa production. According to fertilizer trade statistics published by IHS Markit, several cocoa producers import fertilizer from Russia and Belarus. Côte d’Ivoire and Ghana which represent together more than 60% of the global cocoa production import a large share of nitrogenous and potassium fertilizers from the Russian Federation and Belarus. Fertilizer trade will be affected as sanctions imposed on the Russian Federation and Belarus such as banking restrictions would hamper the payment of fertilizer sales. Many countries are prohibiting ships from Russia to enter or pass through their territories.

Freight charges are also rising. Thus, should this situation persist, cocoa smallholders who are already struggling with high prices of fertilizers will be unable to afford them. In addition, the shortage of fertilizers on cocoa farms will no doubt affect the quantity, quality and size of cocoa beans. There is the likelihood that the cost of cocoa production for the next cocoa season will increase and consequently affect prices.

At the earlier stage of February 2022, prices of the MAR-22 contract followed an upward trend on both sides of the Atlantic, strengthening by 4% from US$2,356 to US$2,461 per tonne in London and by 7% moving from US$2,608 to US$2,778 per tonne in New York. This positive stance was stimulated by information that dry weather was prevailing in the main cocoa producing regions of West Africa. Thereafter, prices halted their climb and from 11 February onwards, the MAR-22 contract traded lower on both the London and New York markets. Hence, prices of the first position contract tumbled by 10% on both markets, moving from US$2,446 to US$2,203 per tonne in London and from US$2,768 to US$2,503 per tonne in New York. As at the time of writing, market participants were concerned that the war in Ukraine and the subsequent economic sanctions announced by the West could cause a strong increase in prices of Russian-led commodities, including crude oil and gas, which in turn could negatively affect the global economy.

FUTURES PRICE DEVELOPMENTS
Notwithstanding the upward trend observed in prices during the first ten days of February 2022, the global cocoa market was bearish during the month under review. Prices of the front-month cocoa futures contract averaged US$2,345 per tonne, down by 5% compared to the average price of the nearby contract (US$2,467 per tonne) recorded at the same period of the preceding crop year, and ranged between US$2,203 and US$2,461 per tonne in London. In New York, the average price of the nearby contract settled at US$2,636 per tonne, up by 3% compared to the average price of US$2,568 per tonne recorded in February 2021, and oscillated between US$2,503 and US$2,778 per tonne.

Alexis Rubinstein

Cocoa

This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.

The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.

References to certain OTC products or swaps are made on behalf of StoneX Markets, LLC (SXM), a member of the National Futures Association (NFA) and provisionally registered with the U.S. Commodity Futures Trading Commission (CFTC) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ and who have been accepted as customers of SXM.

StoneX Financial Inc. (SFI) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Advisor. StoneX Financial (Canada) Inc. (SFCI) is registered in Canada and is a member of CIRO and CIPF. References to certain securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to certain exchange-traded futures and options are made on behalf of the FCM Division of SFI. Wealth Management is offered through SA Stone Wealth Management Inc., member FINRA/SIPC, and SA Stone Investment Advisors Inc., an SEC-registered investment advisor, both wholly owned subsidiaries of SGI.

R.J. O’Brien & Associates, LLC (RJO) is registered with the CFTC as a Futures Commission Merchant and is a member of NFA.

StoneX Financial Ltd (SFL) is registered in England and Wales, company no. 5616586. SFL is authorized and regulated by the Financial Conduct Authority (FCA) (registration number FRN:446717) to provide services to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorized to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorized and regulated by the FCA under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorized by the FCA.

This communication is issued in the European Economic Area by StoneX Financial Europe GmbH (SFEG). StoneX is the trade name used by STONEX GROUP INC. and all its associated entities and subsidiaries. StoneX Financial Europe GmbH (“SFEG”) is a securities trading firm registered in Germany under Company No. HRB 80844.

StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism. SAP is an “Approved International Trading Company” authorized to act as a “Spot Commodity Broker” under the Commodity Trading Act.

StoneX Financial Pte Ltd (Co. Reg. No 201130598R) (“SFP”) is regulated by the Monetary Authority of Singapore and is a Capital Markets Service Licence holder (for dealing in capital market products), an Exempt Financial Adviser (for advising on investment products and issuing or promulgating analyses/ reports on investment products) and a Major Payment Institution (for domestic and cross-border money transfer services).

SFP may distribute analysis/report produced by its respective foreign affiliates within the StoneX Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Recipients should contact SFP at (65) 6309 1000 for any matters arising from, or in connection with, this webinar.

StoneX Financial (HK) Limited (CE No.: BCQ152) (“SHK”) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.

StoneX Financial Pty Ltd (ACN 141 774 727) holds an Australian Financial Service License (AFSL: 345646) for Dealing in Securities, Exchange-Traded Derivatives Contracts, OTC Derivatives Contracts and Foreign Exchange Contracts, and is regulated by the Australian Securities and Investments Commission.

StoneX Securities Co., Ltd. (“SSJ”) (Co. Reg. No 010401047199) is regulated by the Japanese Financial Services Agency as a Type-I Financial Instruments Business Operator (Kanto Local Finance Bureau (FIBO)No.291’), is a member of the Financial Futures Association of Japan for dealing and broking FX and FX Option transactions, and is a member of the Japan Securities Dealers Association for dealing and broking stock indices and option transactions.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

The report/analysis herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Satellite view of Earth at night showing illuminated cities across Asia and the Middle East

Discover more insights

Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.

Explore subscriptions

Perspective: Morning Commentary for August 6

August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

Perspective: Morning Commentary for August 5

August 5 – U.S. equities markets are on fire this week, with both the Dow Jones and S&P 500 setting new all-time highs yesterday with futures indicating further gains again today; the marketplace remains optimistic over a deal with Iran despite no evidence of such as of yet. Crude oil is working on a lower high and low today but remains slightly on the high side on the session, while the dollar is retreating back towards Monday’s nearly two-month low. The ten-year note is steady-to-lower this morning (though solidly lower so far this month) at 4.605%, while the VIX index continues to rebound into mid-week at almost a 17-point reading this morning.

Matt ZellerWed, 05 Aug 2026, 12:39

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

StoneX: We open markets

Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.

Reach

With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.

Transparency

As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.

Expertise

From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.