Cocoa Market Update
On Tuesday, the December ICE NY Cocoa (CCZ25) ended down by 2 points (-0.04%), while the December ICE London Cocoa #7 (CAZ25) saw a rise of 40 points (+1.00%).
Cocoa prices dipped to a 1.75-year low on Tuesday amidst expectations of a strong cocoa harvest in West Africa. Farmers in Ivory Coast reported healthy growth in their cocoa trees, thanks to some recent dry weather that made drying the beans easier. Similarly, in Ghana, favorable weather conditions accelerated the development of cocoa beans. Yet, cocoa prices bounced back later, as a mix of oversold indicators led to some technical short covering by futures funds.
Mondelez, the chocolate manufacturer, shared good news about West Africa’s latest cocoa crop being 7% above the five-year average and notably better than last year’s output. The harvesting of Ivory Coast’s main crops has just kicked off, and there’s optimism about the quality of the cocoa.
Prices are also facing downward pressure due to the Trump administration’s recent decision to lift a 10% reciprocal tariff on non-U.S. goods, cocoa included.
Another interesting dynamic is the decrease in cocoa exports from Ivory Coast, which could positively influence prices. According to government data, Ivorian farmers shipped 516,787 tonnes of cocoa to ports from October 1 to November 16 in this marketing year. This represents a decline of 5.7% compared to 548,494 tonnes in the same timeframe last year.
Alongside this, dwindling ICE cocoa stocks are propping up cocoa prices. The stockpile at U.S. ports has dropped to 1,747,459 bags, marking an eight-month low.
On the demand side, global cocoa consumption remains weak. Hershey’s CEO noted that this year’s Halloween chocolate sales were “disappointing.” Halloween accounts for around 18% of annual candy sales in the U.S., only surpassed by Christmas. Additionally, the Asia Cocoa Association revealed on October 17 that Asia’s cacao milling volume in Q3 was 183,413 pieces, down 17% year-on-year, the lowest for that quarter in nearly a decade. Meanwhile, the European Cocoa Association reported on October 16 that European cocoa crushing volumes fell 4.8% year-on-year to 337,353 tonnes, marking the lowest third quarter in ten years. There was a slight increase in North American cocoa milling volume, up 3.2% year-on-year, but this data was influenced by new reporting companies. Notably, sales of chocolate candy in North America dropped more than 21% during the 13 weeks ending September 7 compared to last year, per research from Circana.
A reduction in cocoa production in Nigeria, the world’s fifth-largest cocoa producer, could be a supportive factor for prices. The Cocoa Association of Nigeria anticipates that Nigeria’s cocoa output in 2025/26 will be 305,000 tonnes, an 11% drop from the estimated 344,000 tonnes for the 2024/25 crop year. Nigeria reported cocoa exports for September were flat year-on-year at 14,511 tonnes.
Earlier this year, on May 30, the International Cocoa Organization (ICCO) adjusted the global cocoa deficit for 2023/24 to -494,000 tonnes, the largest deficit seen in over 60 years. ICCO forecasts that cocoa production for 2023/24 will total 4.380 million metric tons, a 13.1% decrease from the previous year. They’ve also noted a decline in the global cocoa stock-to-crushed ratio to 27.0%, the lowest in 46 years. Looking ahead, ICCO estimates a global cocoa surplus for 2024/25 at 142,000 tonnes, marking the first surplus in four years, with production expected to rise by 7.8% to 4.84 million metric tons.
