March ICE NY cocoa (CCH26) on Tuesday closed down -91 (-1.75%), and December ICE London cocoa #7 (CAZ25) closed down -51 (-1.38%).
Cocoa prices extended their two-week-long selloff on Tuesday and posted new 1.75-year nearest-futures lows on expectations that the EU will delay its deforestation regulation for another year, keeping cocoa supplies ample. Last Wednesday, EU member states proposed delaying the EU's Deforestation Regulation by 1 year. The EU regulation, known as EUDR, aims to tackle deforestation in countries whose imports into the EU include key commodities such as soybeans and cocoa. The delay of the EUDR, which was expected in late December, eases supply concerns and will allow EU countries to continue importing agricultural products from regions in Africa, Indonesia, and South America where deforestation is occurring. The European Parliament is expected to vote on the measure on Wednesday, when it is expected to pass.
