Cocoa Mar '27 (CCH27)

Description

Cocoa is the common name for a powder derived from the fruit seeds of the cacao tree. The Spanish called cocoa "the food of the gods" when they found it in South America 500 years ago. Today, it remains a valued commodity. Dating back to the time of the Aztecs, cocoa was mainly used in a beverage. The processing of cacao seeds, also known as cocoa beans, begins with fermentation or curing of the harvested fruit into a pulpy state for 3 to 9 days. The cocoa beans are then dried in the sun and cleaned in specialized machines before being roasted to bring out the chocolate flavor. After roasting, they are fed into a crusher and ground into cocoa powder. Cocoa has a high nutritional value because it contains up to 20 percent protein, 40 percent carbohydrates, and 40 percent fat. It is also mildly stimulating due to the presence of theobromine, an alkaloid closely related to caffeine. Roughly two-thirds of cocoa bean production is used to make chocolate, and one-third to make cocoa powder.

Four major West African cocoa producers, the Ivory Coast, Ghana, Nigeria, and Cameroon, together account for about two-thirds of world cocoa production. Outside West Africa, the major cocoa producers are Indonesia, Brazil, Malaysia, Ecuador, and the Dominican Republic. Cocoa producers like Ghana and Indonesia have been making efforts to increase cocoa production, while producers like Malaysia have been switching to other crops. Ghana has had an ongoing problem with black pod disease and the smuggling of the crop into the neighboring Ivory Coast. Brazil was once one of the largest cocoa producers, but it has faced challenges from witches' broom disease. In West Africa, the main crop harvest typically starts in September-October and can extend into January-March. Cocoa trees reach maturity in 5-6 years but can live to be 50 years old or more. The cocoa tree will produce thousands of flowers during a growing season, but only a few will develop into cocoa pods.

Cocoa futures and options are traded at the ICE Futures US and ICE Futures Europe exchanges. The futures contract calls for the delivery of 10 metric tons of cocoa, and is priced in US dollars per metric ton.

Prices - ICE cocoa futures (Barchart.com symbol CC) posted their 2025 high in January at $11,882 per metric ton. Unfavorable growing conditions supported cocoa prices after the 2025 Harmattan winds, the driest in six years, worsened crop conditions in cocoa-growing areas in Africa. Tight global inventories were also bullish for prices after ICE-monitored cocoa inventories fell to a 21-year low of 1,263,493 bags in January. However, the supply outlook improved, and prices trended lower into March, after the International Cocoa Organization (ICCO) reported a global cocoa surplus of 142,000 MT for 2024/25, the first surplus in 4 years. Cocoa prices then pushed higher into May amid drought concerns in West Africa, following the African Flood and Drought Monitor's report that drought still covered more than a third of Ghana and the Ivory Coast. Also, ICCO in May revised its 2023/24 global cocoa deficit upward to -494,000 MT from a February estimate of -441,000 MT, the largest deficit in over 60 years, and stated that the 2023/24 global cocoa stocks-to-grindings ratio declined to a 46-year low of 27.0%. Cocoa prices then trended lower for the remainder of 2025 as the global supply outlook improved and demand weakened. The Ghana Cocoa Board projected that the 2025/26 Ghana cocoa crop would increase by +8.3% yr/yr to 650,000 from 600,000 MT in 2024/25. Near-record prices curbed global cocoa demand as Q3 Asian cocoa grindings were the smallest in 9 years, and European cocoa grindings were the smallest in 10 years. Cocoa prices fell to a 2-year low of $4,914 per metric ton in November and finished 2025 down sharply by -48% yr/yr at $6,065 per metric ton.

Supply - The world's production of cocoa beans in the 2024/25 crop year increased by +2.1% at 5.233 million metric tons. The world's largest cocoa producer by far is the Ivory Coast, with 36.1% of global production, followed by Indonesia with 12.1% and Ghana with 10.1%. Closing stocks of cocoa in the 2023/24 crop year fell by -26.9% yr/yr to 1.300 million metric tons.

Demand - World seasonal grindings of cocoa in 2023/24 fell by -4.8% yr/yr to 4.816 million metric tons.

Trade - US imports of cocoa and cocoa products in 2025 rose by +16.8% yr/yr to 1.478 million metric tons.

Information on commodities is courtesy of the cmdty Yearbook, the single most comprehensive source of commodity and futures market information available. Its sources - reports from governments, private industries, and trade and industrial associations - are authoritative, and its historical scope for commodities information is second to none. The CRB Yearbook is part of the Barchart product line. Please visit us for all of your commodity data needs.