Cocoa Prices Experience Decline Amid Regulatory Delays and Harvest Optimism

Today’s figures show a decrease in March ICE NY Cocoa (CCH26) by 78 points, or 1.50%, while December ICE London Cocoa #7 (CAZ25) is down 36 points, or 0.97%. Cocoa prices are hitting a low not seen in 1.75 years, primarily due to expectations that the EU will postpone deforestation regulations for another year, leading to an abundant cocoa supply.

Last Wednesday, EU member nations suggested delaying the implementation of these important regulations, officially known as EUDR, which are intended to address deforestation linked to imported commodities, including cocoa. This postponement, anticipated for late December, alleviates supply worries and permits ongoing imports from deforested areas in Africa, Indonesia, and South America.

In addition to regulatory factors, farmers in West Africa are optimistic about a significant cocoa crop this year. In Ivory Coast, farmers have noted that favorable dry weather is improving the drying process for their cocoa beans. Similarly, Ghanaian farmers reported rapid bean development due to good weather conditions.

Mondelez recently revealed that West Africa’s current cocoa harvest is 7% above the five-year average, significantly surpassing last year’s levels. The main harvesting season in Ivory Coast has just kicked off, and there’s a general sense of positivity about the crop quality.

On another note, cocoa prices are facing downward pressure after an announcement from the Trump administration on November 14 regarding the removal of a 10% reciprocal tariff on imported products, including cocoa.

Moreover, global demand for cocoa has been weak. The CEO of Hershey remarked that this year’s Halloween chocolate sales were “disappointing,” perplexing given that Halloween is a major candy season in the U.S. Additionally, the Asia Cocoa Association reported a 17% year-on-year decline in cacao crushing volume for the third quarter, marking the lowest level in nine years. European cocoa crushing also dipped by 4.8% year-over-year, the weakest third quarter in a decade. While North America’s cocoa milling experienced a slight increase of 3.2%, this was somewhat skewed by new reporting companies. Interestingly, North American chocolate candy sales have plummeted more than 21% in the 13 weeks ending September 7 compared to the previous year.

Conversely, there are some signals supporting cocoa prices, such as a decrease in shipments at Ivorian ports. From October 1 to November 23, Ivorian farmers shipped 618,899 tonnes of cocoa, a 3.7% drop from 642,500 tonnes during the same timeframe last year.

Furthermore, declining ICE cocoa stocks are influencing the prices as well. The cocoa stockpile under ICE oversight at U.S. ports reached an 8.25-month low of 1,723,707 bags on Monday.

A notable decline in production in Nigeria, the fifth-largest cocoa producer, is also affecting the market. The Cocoa Association of Nigeria predicts a reduction in production for the 2025/26 crop year, estimating 305,000 tonnes, which is an 11% decrease from the previous year’s projection.

In related updates, Nigeria’s cocoa exports remained unchanged at 14,511 tonnes for September compared to last year. The International Cocoa Organization (ICCO) recently projected a global cocoa deficit of 494,000 tonnes for the 2023/24 year, marking the largest deficit in over six decades. With a notable decrease in production, ICCO forecasts the global cocoa surplus for the 2024/25 year to be 142,000 tonnes, alongside an expected increase in cocoa production.