{"id":48608,"date":"2019-06-13T00:57:05","date_gmt":"2019-06-13T07:57:05","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=48608"},"modified":"2019-06-13T01:01:41","modified_gmt":"2019-06-13T08:01:41","slug":"cocoas-price-surge-confirmed-by-historic-supply-coordination","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2019\/06\/13\/cocoas-price-surge-confirmed-by-historic-supply-coordination\/","title":{"rendered":"Cocoa&#8217;s Price Surge Confirmed By Historic Supply Coordination"},"content":{"rendered":"\n<p><a rel=\"noreferrer noopener\" aria-label=\"Two years ago (opens in a new tab)\" href=\"https:\/\/seekingalpha.com\/article\/4071715-trading-cocoa-poor-weather-cartel-plans-drive-bids-another-bottom\" target=\"_blank\">Two years ago<\/a>, I wrote about the announcement from the International Cocoa Organization (ICCO) indicating that cocoa-growing countries would coordinate production of cocoa to better support their economies. That news was soon followed by <a href=\"https:\/\/drduru.com\/onetwentytwo\/2017\/05\/25\/trading-cocoa-roller-coaster-of-weather-forecasts-of-surplus\/\">a recommendation from the African Development Bank (AfDB)<\/a> to cocoa producers to find ways to control the supply of cocoa. At the time, the AfDB recommended building large storage facilities to control the supply of cocoa in the market.<\/p>\n\n\n\n<p>The following year, on March 28, 2018, Ghana and the Ivory Coast signed a cocoa cooperation agreement called the \u201cAbidjan Declaration.\u201d The related <a href=\"http:\/\/presidency.gov.gh\/index.php\/briefing-room\/news-style-2\/588-ghana-cote-d-ivoire-sign-abidjan-declaration-on-cocoa\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"press release from the Presidency of the Republic of Ghana (opens in a new tab)\">press release from the Presidency of the Republic of Ghana<\/a> included this firm determination:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>&#8220;&#8230; \u00a0the Declaration is aimed at &#8216;better defending the interests of cocoa producers, as well as the economies of both countries.&#8217;<\/p><p><br>To this end, President Akufo-Addo and President Alassane Ouattara have reaffirmed their commitment to define a better, common strategy and a sustainable solution for the improvement of prices for cocoa producers, in their respective countries.<\/p><p><br>They also committed themselves to harmonizing their cocoa marketing policies, and agreed to announce, every year, in a concomitant manner, and before the beginning of the campaign, the price to cocoa producers.&#8221; <\/p><\/blockquote>\n\n\n\n<p>Another year later, on June 12, 2019, the plans of the two countries are finally coming to fruition. The price of cocoa jumped about 1.4% after <a rel=\"noreferrer noopener\" aria-label=\"they announced the establishment of a price floor (opens in a new tab)\" href=\"https:\/\/www.cocobod.gh\/news_details\/id\/204\/\" target=\"_blank\">they announced the establishment of a price floor<\/a> of US$2,600 that buyers agreed to pay after a 2-day meeting. Until implementation details get settled, the two countries suspended the forward sales of the 2020\/2021 cocoa season.<\/p>\n\n\n\n<p>The price gains helped push the iPath Bloomberg Cocoa SubTR ETN (NIB) further into a breakout above a cap that held for the past 11 months.. In July, 2018, NIB broke down below support at its 200-day moving average (DMA).<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img loading=\"lazy\" decoding=\"async\" width=\"550\" height=\"375\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2019\/06\/190612_NIB.png\" alt=\"The iPath Bloomberg Cocoa SubTR ETN (NIB) began its price run-up at the beginning of June. This week's continuation confirmed last Friday's breakout.\" class=\"wp-image-48609\"\/><figcaption>The iPath Bloomberg Cocoa SubTR ETN (NIB) began its price run-up at the beginning of June. This week&#8217;s continuation confirmed last Friday&#8217;s breakout.<br><strong>Source: FreeStockCharts<\/strong><\/figcaption><\/figure><\/div>\n\n\n\n<p>The chart above indicates that traders well anticipated the coordinated action on price. With the price action stretched so far, I expect some selling on the news. I am a buyer on the dips with the expectation that support at the ascending 50DMA should hold.<\/p>\n\n\n\n<p>Joseph Boahen Aidoo, the chief executive of the Ghana Cocoa Board, <a rel=\"noreferrer noopener\" aria-label=\"called the coordination of cocoa producers &quot;historic. (opens in a new tab)\" href=\"https:\/\/www.ghanaianews.com\/2019\/06\/13\/cocoa-prices-soar-as-ghana-cote-divoire-threaten-supply-cut\/\" target=\"_blank\">called the coordination of cocoa producers &#8220;historic.<\/a>&#8221; This moment should indeed mark a significant turning point in the cocoa market that will strengthen my perma-bull stance on the price of cocoa and NIB by extension.<\/p>\n\n\n\n<p>Be careful out there!<\/p>\n\n\n\n<p>Full disclosure: no positions<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><a href=\"https:\/\/www.misstfoods.com\/\"><img loading=\"lazy\" decoding=\"async\" width=\"550\" height=\"347\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2018\/08\/misstfoods_ad-wide.jpg\" alt=\"Miss T's Foods West Africa Pepper Sauce Mix (Ghana Shetor Mix)\" class=\"wp-image-44672\"\/><\/a><\/figure><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Two years ago, I wrote about the announcement from the International Cocoa Organization (ICCO) indicating that cocoa-growing countries would coordinate production of cocoa to better support their economies. That news was soon followed by a recommendation from the African Development Bank (AfDB) to cocoa producers to find ways to control the supply of cocoa. At &#8230; <a title=\"Cocoa&#8217;s Price Surge Confirmed By Historic Supply Coordination\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2019\/06\/13\/cocoas-price-surge-confirmed-by-historic-supply-coordination\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1226,673,482,62],"tags":[1322,2209,1401,1551,1827,1323],"class_list":["post-48608","post","type-post","status-publish","format-standard","hentry","category-africa","category-agriculture-2","category-breakout","category-technical-analysis","tag-cocoa","tag-cocobod","tag-ghana","tag-ipath-bloomberg-cocoa-subtr-etn","tag-ivory-coast","tag-nib"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Cocoa&#039;s Price Surge Confirmed By Historic Supply Coordination - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2019\/06\/13\/cocoas-price-surge-confirmed-by-historic-supply-coordination\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cocoa&#039;s Price Surge Confirmed By Historic Supply Coordination - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"Two years ago, I wrote about the announcement from the International Cocoa Organization (ICCO) indicating that cocoa-growing countries would coordinate production of cocoa to better support their economies. 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