Cocoa Prices Plummet as Buyers Retrench and Supplies Build

March ICE NY cocoa (CCH26) today is down -232 (-7.19%), and March ICE London cocoa #7 (CAH26) is down -124 (-5.47%).

Cocoa prices extended their six-week-long selloff today, sinking to 2.75-year nearest-futures lows.   International cocoa buyers are reluctant to pay official prices for beans in the Ivory Coast and Ghana amid concerns that prices will fall even further.  The lack of buyers is boosting supplies as ICE cocoa inventories rose to a 5-month high of 2,036,385 bags on Tuesday.

Losses in London cocoa are contained due to weakness in the British pound (^GBPUSD).  The pound fell to a 4-week low today, supporting cocoa that is priced ion terms of sterling.

Last week, Ghana cut the official price it pays its cocoa farmers by nearly 30% for supplies for the 2025/26 growing season, and Reuters reported on Wednesday that the Ivory Coast is considering a similar cut.  The Ivory Coast and Ghana produce more than half of the world's cocoa.  

Cocoa prices are in the midst of a six-week-long downtrend amid robust global supplies and slack demand.  On January 29, StoneX 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 on January 23 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.  On January 28, 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.

Favorable growing conditions in West Africa are also a negative factor for 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.

Also undercutting cocoa prices are higher exports from Nigeria, the world's fifth-largest cocoa producer.  Last Tuesday, Bloomberg reported that Nigerian Dec cocoa exports rose +17% y/y to 54,799 MT.

Slowing cocoa deliveries to ports in the Ivory Coast is a supportive factor for prices.  Monday's cumulative data showed that Ivory Coast farmers shipped 1.30 MMT of cocoa to ports in the current marketing year (October 1, 2025, through February 15, 2026), down -3.0% from 1.34 MMT in the same period a year ago.  

On the positive side, Nigeria's Cocoa Association projects that Nigerian cocoa production in 2025/26 will fall by -11% y/y to 305,000 MT, from a projected 344,000 MT for the 2024/25 crop year.  

The International Cocoa Organization (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.  Rabobank on February 10 cut its 2025/26 global cocoa surplus estimate to 250,000 MT from a November forecast of 328,000 MT.