Cocoa prices, which had shown signs of stabilizing or potentially entering a bearish trend due to high prices and a weak La Niña event, are defying expectations. A significant weather event—the Harmattan Wind—now threatens to disrupt the cocoa harvest, further pushing prices higher.
The Harmattan is a cool, dry wind that sweeps from the Sahara Desert across West Africa, particularly affecting cocoa-growing regions like Ghana and the Ivory Coast. This wind, which typically blows from late November to mid-March, is already having a detrimental impact on the smaller cocoa mid-crop usually harvested in the spring. Despite predictions of a weak La Niña event, a combination of climate change, unusually warm global oceans, and a warm atmospheric ridge over Europe has intensified the Harmattan, disrupting the normal weather patterns.
Key Characteristics of the Harmattan:
- Originates from the Sahara Desert
- Moves northeast to southwest
- Extremely dry with humidity often dropping below 5%
- Carries fine dust particles, reducing visibility and creating a haze
- Causes drastic temperature fluctuations, ranging from chilly mornings around 9°C (48°F) to hot afternoons reaching 30°C (86°F)
The Harmattan’s dryness has earned it the nickname “doctor wind,” as it can feel refreshing compared to the usual tropical humidity. However, the wind’s extreme dryness also brings significant risks: it heightens fire danger, damages crops, and can even cause dust storms. For cocoa farmers, the Harmattan’s impact is particularly severe, as it can strip moisture from crops and stunt their growth, affecting both the yield and quality of the harvest.
As a result of these disruptions, cocoa prices are expected to remain strong in the coming months. While there had been concerns about declining demand due to high prices and a strong U.S. dollar, demand for cocoa continues to hold steady. In fact, the market’s sentiment is shifting toward a bullish outlook. A proprietary weather analysis tool, the “Best Weather Spider,” assesses market sentiment across multiple categories, with factors such as the global crop score and seasonal trends leaning toward higher cocoa prices through February.
With the Harmattan wind exacerbating already difficult conditions for cocoa production, traders and analysts are bracing for continued price increases, potentially creating a bull market for cocoa in the months ahead.
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