Analysts at Marex Spectron are expecting that the deficit in the cocoa market will be lower than anticipated. “The analysts envisage a supply deficit of 25,000 to 50,000 tons,” said Commerzbank Research. “In January, they were still assuming a deficit of 100,000 tons. Now they expect demand to be somewhat lower on account of the higher prices. On the other hand, they are more optimistic about production because the cocoa in West Africa appears to have come through the drought in better condition than had been feared. The dry season there is ending now, and rainfall is forecast for early March. This improves the prospects for the second half of the mid-crop in particular, which runs from April to September.”

As Commerzbank Research noted, the International Cocoa Organization (ICCO) will be publishing its first estimate of the global market balance in 2019/20 in the next few days.