The Zhitong Finance App learned that as major producers are expected to face more humid weather, increasing market volatility, cocoa prices plummeted on Monday, taking back most of the strong increase that surged to record highs earlier this year.

On Monday, New York's most active cocoa futures contract fell by 19%, the biggest one-day decline since 1960, while London futures fell as much as 18%. Rainfall boosted crop prospects, while low open positions in the cocoa market amplified price fluctuations.

Donald Keeney, a senior meteorologist at Maxar Technologies Inc., said in an email that rainfall “should greatly improve” conditions in Ghana and Indonesia, the world's second-largest producers. Cote d'Ivoire, the biggest producer, will also benefit from the humid weather, but more rain is still needed to completely end the pressure of the drought on crops, Keeney said.

Additionally, John Goodwin, a senior commodity analyst at ArrowStream Inc., said that a low level of open positions means “the slightest update to West Africa's weather forecast or signs of disrupted demand will cause large price fluctuations.”

According to information, major cocoa producers in West Africa lack moisture, which is putting pressure on supply in markets already hit by tree aging and disease. Cocoa prices rebounded 9% last week, and fund managers raised net bullish bets to their highest level in three weeks. Despite this, some expect the record price set in mid-April to mark the peak of this historic rally.

Although the price of cocoa fell sharply on Monday, the price of cocoa has accumulated a cumulative increase of nearly 70% so far this year, rising 137% over the past 12 months.