Some analysts say "global risk sentiment" is holding back cocoa from further gains. European stock markets have been weak is negative for cocoa. Demand is weak in Europe which accounts for 1/3 of all cocoa processing. West Africa has been having cocoa supply problems. A landslide outside of the major Ivory Coast city of Abidjan killed more than a dozen people and was caused by rainfall over a 4-day period. Rain there is more than three times the normal amount. Heavy rainfall causes supply bottlenecks for moving cocoa beans toward Ivory Coast ports, difficu.ty in drying cocoa beans, and also kncking flowers and small pods off cocoa trees. In other areas like Nigeria, a lack of rainfall could result in a sharp decline in Nigeria's mid-crop output.

Cocoa buyers and processors meeting in Accra this week agreed to a floor price oif $2,600 per ton proposed by top producers Ivory Coast and Ghana. The agreement followed two days of meetings in the Ghanian capital, representing a step forward toward cooperation efforts by Ivory Coast and Ghana. The countries are seeking to exert more influence over the market to ensure their farmers and economies derive more benefit from the industry. It is not clear how the process will work, and a technical meeting will be held in July to nail down the practicalities. Ghana will only sell cocoa for the 2020-21 season at the minimum price of $2,600./ton. The countries will manage production and are working to boost cocoa demand to offset any "marginal" increase in output as a result of floor price. Ivory Coast and Ghana account for about 60% of global cocoa supply. Rabobank said earlier that a $2,600 minimum price would probably result in overproduction. Meanwhile, top cocoa growers have haltee 2020 sales amid minimum price talks. African coicoa growers are having an "OPEC moment." The minimum price would produce a "live income differential " of $400/ton. The base price represents a 5.2% increase over farmgate prices in the previous year. Periods of low inflation help farmers reduce their costs while maintaining their selling prices.

Market reaction fo the talks allowed cocoa to extend gains in New York to the highest close in about a year.

Climate change has been hurting coffee production in Central America, causing farmers there to shift crops to cocoa. In Honduras the government is requiring growers to substitute 8% of coffee land to cocoa. But Central America will not supplant West Africa as the primary supplier of cocoa any time soon.

There has been a serious outbreak of locusts in East Africa, spurred by favorable weather conditions for the desert locusts, despite concerted use of pesticides. The pests can migrate 150 km/day.

"Farm gate price" is defined as the net price of a product when it leaves the farm, after marketing costs have been subtracted (which many farms do not have). Delivery and transportation costs are not included.

Sustainability problems have hurt cocoa farmers as governments strive to protect remaining forest lands. $400/ton is not enough to sustain adequate living conditions for farmers who need to make at least 20% above their cost of production when admitting cocoa beans into the supply chain. There are great variations in qua.lity of product.