On Tuesday, March Ice New York Cocoa (CCH26) fell by 297 points, or 7.24%, while March Ice London Cocoa #7 (CAH26) dropped by 206 points, equating to a 6.97% decrease.
Cocoa prices tumbled, with New York cocoa reaching a 2.25-year low in the latest futures trading. Over the past six weeks, prices have plummeted due to an oversupply globally coupled with low demand. London cocoa also hit a two-and-a-half-year low on January 30. The decline sped up after Nigeria announced cocoa exports for December at 54,799 tonnes, which reflects a 17% increase from the previous year. Notably, Nigeria ranks as the fifth-largest cocoa producer worldwide.
On January 29, StoneX projected a global cocoa surplus of 287,000 tonnes for the 2025/26 season, followed by 267,000 tonnes in 2026/27. Meanwhile, the International Cocoa Organization (ICCO) reported on January 23 that global cocoa stocks saw a 4.2% increase year-on-year, reaching 1.1 million metric tonnes.
The abundant cocoa stocks under the watch of ICE have been pressuring prices. As of Tuesday, ICE cocoa inventories climbed to 1,836,511 bags, marking the highest levels in about three and a half months.
Concerns over demand are adversely affecting cocoa prices, as consumers hesitate amidst high chocolate costs. Barry Callebaut AG, the largest bulk chocolate producer, reported a 22% drop in volume within its cocoa division for the quarter ending November 30, attributing this to “negative market demand” and focusing on higher-profit cocoa segments.
Weak demand was also highlighted in the grinding report. On January 15, the European Cocoa Association revealed European cocoa crushing volumes in the fourth quarter fell by 8.3% from the previous year, totaling 304,470 tonnes. This was a greater decline than the anticipated 2.9% drop, making it the lowest for the fourth quarter in a dozen years. Additionally, the Asia Cocoa Association reported a 4.8% year-on-year decrease in its fourth quarter cocoa crushing volumes to 197,022 tonnes. In contrast, the National Confectionery Association indicated that North American cocoa milling volume remained stable at 103,117 tonnes in the fourth quarter, up by 0.3% year on year.
A slowdown in cocoa shipments to Ivorian ports is somewhat supporting prices. Current reports show that Ivorian farmers have sent 1.27 million metric tonnes of cocoa to ports since the marketing year began on October 1, which is a 3.8% decline from the 1.32 million metric tonnes shipped during the same timeframe last year. The Ivory Coast is the leading cocoa producer worldwide.
Favorable growing conditions in West Africa are also contributing to downward pressure on cocoa prices. Tropical General Investment Group indicated that cocoa harvests in Ivory Coast and Ghana are expected to improve in February and March, with farmers noting larger and healthier pods compared to last year.
Chocolate manufacturer Mondelez recently reported that West Africa’s recent cocoa yield surpassed the five-year average by 7% and is “significantly higher” than last year’s figures. Harvesting of the main crops in Ivory Coast has started, and farmers express optimism regarding the harvest quality.
On a more positive note, the Cocoa Association of Nigeria forecasts that Nigeria’s cocoa production for 2025/26 will reach 305,000 tonnes, representing an 11% decrease from the projected 344,000 tonnes for the 2024/25 crop year.
Despite the pressure on prices, a tight global supply outlook offers some support. The ICCO, on November 28, revised its surplus forecast for global cocoa in 2024/25 down to 49,000 tonnes, revising down from a previous estimate of 142,000 tonnes. Estimates for global cocoa production in that same year were cut from 4.84 million metric tonnes to 4.69 million metric tonnes. Further, Rabobank recently adjusted its surplus forecast for the 2025/26 season to 250,000 tonnes, down from its November prediction of 328,000 tonnes.
On May 30, the ICCO updated its global cocoa deficit estimate for 2023/24 to a staggering 494,000 tonnes, the largest deficit seen in over 60 years. They announced that production for 2023/24 had contracted by 12.9% from the year before, totaling 4.368 million metric tonnes. Then on December 19, the ICCO predicted a global cocoa surplus of 49,000 tonnes for 2024/25—the first in four years—and also noted that production would increase by 7.4% from the previous year, reaching 4.69 million metric tonnes.
