2023-11-03 17:30:56
Friday in New York, a ton of cocoa peaked at $3,893. Monday in London, she reached the peak of 3,385 pounds. These peaks are explained by “the expected drop in production in Ivory Coast”, according to the Commerzbank expert.
Cocoa broke new price records this week in London and New York, galvanized by tight supplies from producing countries, notably the Ivory Coast, due to unfavorable weather conditions.
On Monday, in London, a tonne of cocoa peaked at 3,385 pounds sterling, a record price recorded since the start of the contract in 1989 and which therefore exceeds the previous peaks reached during the civil war in Ivory Coast.
In New York, it touched $3,893 on Friday, a new record since the end of 1978, i.e. 45 years.
These peaks are explained by “the expected drop in production in Ivory Coast, by far the largest cocoa producer with more than 40% of the volume of the world harvest,” says Carsten Fritsch of Commerzbank.
According to the analyst, the current quarter’s harvest could be nearly 30% lower than last year, according to cocoa producers.
This drop in production is due to unfavorable climatic conditions in the producing regions.
“At the beginning, the weather was too dry for a prolonged period, which hampered the development” of the young shoots, explains Mr. Fritsch.
Abundant rains then led to the development of diseases in the crops, notably black pod disease – which causes blackening and rotting of cocoa pods.
At the same time, the El Niño climatic phenomenon is driving up the prices of certain agricultural raw materials including cocoa, produced in exposed regions such as West Africa.
Around 4:00 p.m. GMT (5:00 p.m. in Paris) in London on Friday, a tonne of cocoa for delivery in March 2024 was worth 3,329 pounds sterling, compared to 3,358 pounds sterling a week earlier at the end of the session.
In New York, a tonne for delivery in December 2023 was worth $3,883 at the same time, compared to $3,852 last Friday.
Nickel bends
Nickel continued its decline over the week, reaching a new low in more than two years, in a context of solid supplies, particularly from Indonesia, and sluggish demand.
On Thursday, the metal in fact reached its lowest price since October 2021, at $17,885 per tonne, returning to its 2021 price levels, far from its stratospheric peaks reached at the start of the war in Ukraine.
“While not only zinc, but also copper and aluminum have been able to regain ground recently, the price of nickel remains weak,” notes Thu Lan Nguyen of Commerzbank.
The price of the metal on the London Metal Exchange (LME) has in fact been falling almost constantly since the start of 2023. Since January, nickel has lost almost 40%.
“This suggests that considerable skepticism remains about the demand outlook, while support has recently come mainly from the supply side,” she explains.
The “solid growth in supply in Indonesia” in fact still guarantees an abundant supply of nickel, according to the analyst.
ANZ analysts say metals like nickel “appear likely to remain oversupplied in the near term, which should keep prices lower.”
On the LME, a tonne of nickel for delivery in three months traded at 18,230 dollars on Friday, compared to 18,374 dollars the previous Friday at the close.
L’or patine
Gold ended the week very slightly down, continuing to flirt with the $2,000 per ounce mark, which it briefly crossed again on Friday following the publication of figures on American employment. below expectations, which caused the dollar, the yellow metal’s active competitor, to collapse.
“The jobs report gave gold a big boost as investors saw it as further evidence that further rate hikes would not be necessary” for the US Federal Reserve (Fed), says Craig Erlam, from Oanda.
As a result, the dollar fell, strengthening the comparative appeal of gold, also considered a safe haven.
On Friday, the precious metal reached $2,004.10 per ounce before falling – its highest point for the week remaining on Tuesday, at $2,007.95.
But the $2,000 barrier remains a “significant psychological obstacle” for the market, notes the Oanda analyst.
The war between Israel and Hamas remains an upward factor for the price of gold. “Financial markets continue to assess the risk of an escalation, stimulating demand for gold” as a safe haven, recalls Ricardo Evangelista, analyst at ActivTrades.
But this effect is less felt, because the conflict is perceived by investors as contained, moderates Han Tan, analyst at Exinity.
Global demand for gold also fell further in the third quarter according to the quarterly report of the World Gold Council (WGC) published on Tuesday.
The high interest rate environment of the main central banks, the strength of the American dollar which reduces the purchasing power of buyers and persistent inflation have in fact discouraged investors, both professionals and individuals.
An ounce of gold traded for $1,992.89, compared to $2,006.37 seven days earlier at the end of trading.
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