Cocoa prices reached their highest level in 46 years on the London Intercontinental Exchange on Wednesday, driven by concerns over bad weather conditions in West Africa, the primary cocoa-producing region.

The benchmark September contract for cocoa in London rose by over 2% to reach £2,590 per metric ton, marking the highest price since 1977.

The price surge is a response to the tight market for cocoa beans, primarily produced in Ivory Coast and Ghana. Cocoa arrivals at Ivory Coast ports for export have declined by nearly 5% this season, contributing to the concerns.

The International Cocoa Organization (ICCO) recently revised its forecast for a global cocoa supply deficit from 60,000 metric tons to 142,000 metric tons.

Leonardo Rosseti, a cocoa analyst at broker StoneX, highlighted that this is the second consecutive season facing a supply deficit. He also noted that the stocks-to-use ratio, an important indicator of cocoa availability, is expected to drop to 32.2%, the lowest since the 1984/85 season.

Compounding the situation, above-average rainfall in Ivory Coast has caused flooding in some cocoa fields, posing a potential threat to the upcoming main crop season starting in October. The excessive rains are also impacting the drying process for already collected cocoa beans.

Experts from Refinitiv Commodities Research predict that the West African cocoa belt will experience moderate to high rainfall over the next 10 days, further adding to the supply concerns.

Cocoa prices in New York also saw a notable increase, with the September contract rising by 2.7% to $3,348 per metric ton, reaching the highest level in 7-1/2 years.

In contrast, other soft commodities experienced different price movements, including a decline in July raw sugar by 2% and a decrease of 3% in Arabica coffee. Robusta coffee fell by 3.6% to $2,616 per metric ton.