(Bloomberg) -- Cocoa extended its longest slump so far this year after a record-breaking rally that saw prices more than double in a matter of months on acute supply concerns.

Futures in New York were down as much as 3.9% in Thursday trade, falling for a third straight day. The number of outstanding contracts continued to decline following recent cuts in money-manager bets that drained aggregate open interest to the lowest since 2020. 

Prospects of higher pay for farmers are raising hopes of a supply boost in West Africa. Top grower Ivory Coast increased farm-gate prices by 50% for mid-crop beans, while neighboring Ghana is considering a similar move, Bloomberg reported on Wednesday. Boosting farm income in the the two largest cocoa-producing nations is expected to encourage growers to deliver more beans lift investment in their operations.

Read More: Why Cocoa Prices Spiked, What It Means for Consumers: QuickTake

The rapid pace of price gains in the second half of March — from $8,000 a ton to $10,000 — suggests that momentum rather than a fresh fundamental shift was the driver, according to a group of Citigroup Inc. analysts that includes Aakash Doshi. The next two months “could represent a turning point in the cocoa bull cycle.” 

A team of JPMorgan Chase & Co. analysts including Tracey Allen estimated cocoa prices prices will come down slightly over the medium term while still remaining historically high, tracking around the $6,000 mark.

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