(Bloomberg) -- Sales of next season’s cocoa crop in top producer Ivory Coast are off to a slow start, as exporters reel from a blistering rally that has made it riskier to hedge purchases.
Le Conseil du Cafe-Cacao, Ivory Coast’s cocoa industry regulator, began sales last month for the 2025-26 season that starts in October, according to people familiar with the matter, who asked not to be identified because they aren’t authorized to speak to the media. While the timing is in line with normal, sales have so far been slow and stood at less than 200,000 tons as of early February, the people said.
That’s because traders typically hedge their bean purchases by selling futures. But as futures rallied, the Intercontinental Exchange Inc. has raised the amount that traders — including those who’ve hedged physical holdings — are required to pay in margins, which serve as an insurance policy to cover potential losses.
By comparison, last year’s forward sales for the main-crop were at least four times that level at a similar time.
The sluggish forward sales come at a time when global cocoa supplies have faced back-to-back shortages, propelling the most-active futures to record levels late last year. That has made it costlier to hold positions in the market, prompting traders to be more cautious about buying beans this far in advance, according to two traders who asked not to be identified.
A spokeswoman for the CCC said the country follows international market prices to value contracts, without commenting on the volume sold.
Ivory Coast, the world’s top producer of the bean, tightly controls the industry and regulates prices paid to farmers, and sales of the crop. The bulk of harvests are typically sold months ahead of each new season, with exporters buying a large chunk of the main crop — the bigger of the two collected annually.
The smaller mid-crop, which starts around April, is mostly reserved for local processors.
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