Cocoa prices have recently experienced a significant drop, driven by favorable weather conditions across West Africa, the region responsible for the majority of the world’s cocoa production. In particular, improved rainfall in countries like Ivory Coast and Ghana has boosted crop prospects, alleviating previous concerns about tight global supplies.

This has led to a sell-off in cocoa futures, with the December contract on the ICE NY cocoa exchange dropping by over 5%, marking a notable three-week low. A similar decline was observed in London cocoa futures, with prices hitting a six-month low.

The bearish sentiment surrounding cocoa prices is further supported by increased exports from Nigeria, the world’s sixth-largest cocoa producer, which saw a 31% year-on-year surge in July.

Despite previous fears of production deficits, the recent weather improvements have overshadowed concerns about lower production in Ivory Coast and tight inventories in the U.S. market.