At GBP 1,747/MT, the monthly price of cocoa bean futures at the InterContinental Exchange (ICE) London increased by GBP 81/MT (+4.9%) month-on-month (m-o-m), and by GBP 57/MT (+3.4%) y-o-y in January 2022. The ICE New York (NY) benchmark price rose by USD 108/MT (+4.3%) m-o-m, and by USD 10/MT (+4.6%) y-o-y in January 2022 to USD 2,589/MT. Terminal prices rebounded in January from the five-month lows in mid-November 2021, amid supply concerns from the West African cocoa-growing heartlands, related to dry weather.
Strengthening demand is another factor helping to boost cocoa prices. The European Cocoa Association (ECA) reported Q4 2021 cocoa bean grindings rose by 14,070 tonnes (+4.0% y-o-y), while aggregate European grindings for the 2021 Calendar year (CY) grew by 138,000 tonnes (+6.1%) y-o-y to 1.46 m tonnes, which was the highest volume in over 20 years. A strong Asian demand recovery was also evident in Q4 2021, as many COVID-19 related economic restrictions were gradually eased, fuelling cocoa consumption. ICE-monitored US cocoa inventories fell to a nine-and-a-half month low in January 2022, suggesting that resurgent consumer demand could be driving the market, although this may also be caused by US grinders reportedly clearing old stock to avoid paying additional storage penalties.
Cocoa bean terminal prices are expected to gain further impetus in Q1 2022, particularly due to a spike in global chocolate consumption typically associated with the Valentine's Day celebrations on 14th February 2022. Indeed, average prices at the ICE London and NY benchmarks peaked at respective four-month highs during the week preceding Valentine’s Day.