March ICE NY cocoa (CCH26) on Friday closed down -12 (-0.29%), and March ICE London cocoa #7 (CAH26) closed down -1 (-0.03%).
Cocoa prices extended their month-long slide on Friday, with NY cocoa posting a 2.25-year nearest-futures low and London cocoa posting a 2.5-year nearest-futures low.
Abundant global supplies and slack demand are keeping pressure on cocoa prices. StoneX on Thursday forecasted a global cocoa surplus of 287,000 MT in the 2025/26 season and a 267,000 MT surplus for 2026/27. Also, the International Cocoa Organization (ICCO) reported last Friday that global cocoa stocks rose 4.2% y/y to 1.1 MMT.
Demand concerns have hammered cocoa prices as consumers continue to balk at the high price of chocolate. Last Wednesday, Barry Callebaut AG, the world’s largest bulk chocolate maker, reported a -22% decline in sales volume in its cocoa division for the quarter ending November 30, citing “negative market demand and a prioritization of volume toward higher-return segments within cocoa.”
Grinding reports also showed weak demand. On January 15, the European Cocoa Association reported that Q4 European cocoa grindings fell -8.3% y/y to 304,470 MT, a bigger decline than expectations of -2.9% y/y and the lowest for a Q4 in 12 years. On December 16, the Cocoa Association of Asia reported that Q4 Asian cocoa grindings fell -4.8% y/y to 197,022 MT. Also, the National Confectioners Association reported Q4 North American cocoa grindings rose only +0.3% y/y to 103,117 MT.
Since posting a 10.5-month low of 1,626,105 bags on December 26, ICE-monitored cocoa inventories held in US ports have rebounded, a bearish factor for prices. ICE cocoa inventories climbed to a 2.5-month high of 1,775,219 bags on Thursday.
Favorable growing conditions in West Africa are also weighing on cocoa prices. Tropical General Investments Group recently said that favorable growing conditions in West Africa are expected to boost the February-March cocoa harvest in the Ivory Coast and Ghana, as farmers report larger and healthier pods compared with the same period last year.
Chocolate maker Mondelez recently said that the latest cocoa pod count in West Africa is 7% above the five-year average and “materially higher” than last year’s crop. Harvest of the Ivory Coast’s main crop has begun, and farmers are optimistic about its quality.
On the positive side, West African producers are holding back supplies due to low prices. Monday’s cumulative data showed that Ivory Coast farmers shipped 1.20 MMT of cocoa to ports in the current marketing year (October 1, 2025, through January 25, 2026), down -3.2% from 1.24 MMT in the same period a year ago. The Ivory Coast is the world’s largest cocoa producer.
Smaller cocoa supplies from Nigeria, the world’s fifth-largest cocoa producer, are supportive for prices. Nigeria’s November cocoa exports fell -7% y/y to 35,203 MT. Nigeria’s Cocoa Association projects that Nigeria’s 2025/26 cocoa production will fall by -11% y/y to 305,000 MT from a projected 344,000 MT for the 2024/25 crop year.
Cocoa prices have support on a tightening global supply outlook. On November 28, the International Cocoa Organization (ICCO) cut its global 2024/25 cocoa surplus estimate to 49,000 MT from a previous estimate of 142,000 MT. It also lowered its global cocoa production estimate for 2024/25 to 4.69 MMT from 4.84 MMT previously. In addition, Rabobank last Tuesday cut its 2025/26 global cocoa surplus estimate to 250,000 MT from a November forecast of 328,000 MT.
On May 30, the International Cocoa Organization (ICCO) revised its 2023/24 global cocoa deficit to -494,000 MT, the largest deficit in over 60 years. ICCO said 2023/24 cocoa production fell by -12.9% y/y to 4.368 MMT. ICCO on December 19 estimated a 2024/25 global cocoa surplus of 49,000 MT, marking the first surplus in four years. ICCO also said global cocoa production in 2024/25 rose by +7.4% y/y to 4.69 MMT.
Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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