Ivory Coast Cuts its Contract Sales Limit

COCOA

Ivory Coast’s Coffee and Cocoa Council said Tuesday that the nation will cut its contract sales limit for the 2025/26 marketing year to 1.3 million metric tons from the 1.7 million of the past couple of years. The nation’s cocoa production fell to 1.75 million tons in 2023/24 and is expected to be around that level in 2024/25, which will leaving domestic supplies very tight. This may not be a surprise to the market coming in the wake forecasts for a 40% decline in mid-crop production, but it does indicate that tight global supply will not be alleviated quickly. In its recent update, the ICCO had Ivory Coast production at 1.850 million tons, up from 1.674 in 2023/24. World Weather Service expects much of West Africa to see regular rounds of showers and thunderstorms through the next week, which could be beneficial for later in the season. Midcrop forecasts are down because of dry conditions earlier in the season. ICE certified cocoa stocks increased 3,512 bags yesterday to 1.787 million, which is the highest since October 28.

COTTON

May Cotton was higher overnight, but it remains under the bearish technical influence of its failure at the 50-day moving average last week and from the disappointing export sales report last Thursday. Uncertainty over tariffs doesn’t help the demand outlook either, even though China has greatly reduced its purchased of US cotton this year. For the USDA Prospective Plantings report on Monday, the Bloomberg survey shows an average trade expectation for US 2025 cotton plantings at 9.9 million acres (range 8.8-10.5 million) versus 10.0 million in the Outlook Forum in February and 11.2 million last year. Some traders have suggested that plantings could be even lower with prices having fallen to new four-year lows earlier this month. World Weather Service says South Texas and the Texas Coastal Bend will receive heavy rainfall in the coming five days that will support cotton planting. West Texas precipitation will be minimal for a while longer.

SUGAR

Concerns that India will not be able export its quota of 1 million metric tons in 2024/25 have supported the market in recent weeks, but a story published by Reuters had sources inside government saying that India has more than enough stocks to meet domestic consumption and ethanol requirements. Ending stocks for 2025 are expected to total 5.4 million tons, enough to cover more than two months of domestic demand. The 5.4 million-ton figure was already asserted by the Indian Sugar & Bio-Energy Manufacturers Association in a report last week. There are concerns that the dry conditions in Brazil will delay the start of the 2025/26 crop, which begins in April (April to May) crop in Brazil.

COFFEE

Low expectations for the Brazilian arabica crop are supporting a rally in May Coffee. World Weather Service expects most coffee production areas in Brazil to receive rain at one time or another during the next ten days, but warm temperatures will keep evaporation rates high. More rain is needed. Rabobank said yesterday that dry weather until the start of the 2024/25 harvest could lead to further reductions in 2025/26 production and to sub-par branch growth for 2026/27. Uganda’s coffee exports (mostly robusta) totaled 555,756 bags in February, +28% from last year. Uganda is Africa’s largest exporter. ICE certified arabica stocks increased by 2,325 bags yesterday to 781,958.

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