Cocoa Prices Hit Low Amid Positive Crop Outlook
Today, December ICE NY Cocoa (CCZ25) is down 302 points, or 5.74%, while December ICE London Cocoa #7 (CAZ25) sees a drop of 238 points, or 5.87%.
Cocoa prices have plunged to a 1.75-year low as optimism grows over a potential bumper crop in West Africa. Farmers in Ivory Coast are reporting healthy growth in their cocoa trees, aided by recent dry weather that has improved the drying process for the beans. In Ghana, good weather conditions are reportedly speeding up the development of cocoa beans.
Mondelez, a well-known chocolate manufacturer, recently disclosed that this year’s cocoa crop in West Africa is 7% above the five-year average and significantly outperforms last year’s. With the harvesting season in the Ivory Coast just getting underway, farmers are feeling positive about the quality of their crops.
Prices are also being pressured by the recent announcement from the Trump administration to eliminate a 10% reciprocal tariff on non-U.S. goods, including cocoa.
Weak demand for cocoa globally is another factor dragging prices down. For instance, on October 30, the CEO of Hershey mentioned that chocolate sales during the Halloween season this year were “disappointing.” Halloween typically contributes nearly 18% of annual candy sales in the U.S., just behind Christmas. Furthermore, the Asia Cocoa Association reported a significant decrease in cocoa milling volume in Asia, citing a 17% year-on-year drop, the lowest in nine years for the third quarter. Similarly, the European Cocoa Association indicated a 4.8% decline in cocoa crushing volumes in Europe, marking the weakest third quarter in a decade. On a somewhat brighter note, North America’s cocoa milling volume rose 3.2% year-on-year to 112,784 tons, but this may be misleading due to changes in reporting companies. Compounding these issues, North American chocolate candy sales dropped over 21% in the 13 weeks ending September 7, according to research from Circana.
Interestingly, indications of a slowdown in cocoa exports from the Ivory Coast, the top cocoa-producing nation, could provide some support for prices. According to government data, Ivorian farmers shipped 516,787 tonnes of cocoa between October 1 and November 16, which is 5.7% lower than the 548,494 tonnes shipped in the same timeframe last year.
On the supply side, declining ICE cocoa stocks also lend some support to prices. The stockpile monitored by ICE at U.S. ports has dwindled to 1,747,459 bags, the lowest level noted in eight months.
Another factor impacting cocoa prices is a predicted decline in production in Nigeria, the fifth-largest cocoa producer globally. The Cocoa Association of Nigeria anticipates that cocoa production for the 2025/26 season will drop to 305,000 tonnes, which is an 11% decrease compared to the estimated 344,000 tonnes for the 2024/25 crop year. In related news, Nigeria’s cocoa exports were reported at 14,511 tonnes in September, which remained unchanged year-on-year.
In a broader context, on May 30, the International Cocoa Organization (ICCO) revised its forecast for a global cocoa deficit in 2023/24 to 494,000 tonnes—the most significant shortfall in over six decades. According to the ICCO, global cocoa production for 2023/24 is expected to be 4.380 million metric tons, down 13.1% from the previous year. They also indicated that the global cocoa stock-to-crushed ratio has fallen to 27.0%, the lowest it’s been in 46 years. However, there’s a silver lining: the ICCO predicts a global cocoa surplus of 142,000 tonnes for 2024/25, the first surplus in four years, with production expected to rise by 7.8% year-on-year to 4.84 million metric tons.
