As prospects for the current crop begin to look up, cocoa prices plunged to their lowest point in more than nine months on Monday morning, according to Bloomberg.
Ivory Coast and Ghana, the two West African nations that lead the world in cocoa production, are both expecting significant rainfall in the coming week, potentially between one-and-a-half and two inches. The help for the countries' crops will only add to large stocks to drive prices down.
"Widespread rains have arrived in West Africa, providing welcome relief to cocoa producers," wrote Kona Haque, an analyst at Macquarie Group Ltd. in London, according to the news source. "This is likely adding to the bearish near-term sentiment."
As of 10:19 a.m. New York time, cocoa futures had fallen 0.91 percent, a $19 decline to $2,061 per metric ton.
The Wall Street Journal reports that the surprisingly high quality of the recent crop has been one of the biggest driving factors in continuing dive in cocoa prices, as yields have come in far above expectations. Despite this, the International Cocoa Organization has predicted that supplies will actually fall short of demand by the end of this marketing year.
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