Cocoa Prices Jump as Global Supply Outlook Tightens
Cocoa prices are climbing today, marking one-month highs as the global supply picture grows tighter. March ICE NY cocoa futures (CCH26) are up by 348 points, or 5.92%, while March ICE London cocoa futures (#7, CAH26) gain 247 points, or 5.81%.
Over the past two weeks, prices have surged on a tightening supply outlook. The International Cocoa Organization (ICCO) reduced its 2024/25 global cocoa surplus estimate to 49,000 metric tons from 142,000 tons and lowered its production forecast to 4.69 million metric tons from 4.84 million. Rabobank likewise trimmed its 2025/26 global cocoa surplus forecast to 250,000 tons from 328,000 tons in a prior estimate.
Support for higher prices also comes from shrinking ICE cocoa inventories. US-port stocks monitored by ICE fell to an 8.75‑month low of 1,672,131 bags on Tuesday.
Ivory Coast port arrivals are another factor. Government data show that Ivory Coast farmers shipped 804,288 metric tons of cocoa to ports between October 1 and December 7, down 1.8% from 819,425 tons in the same period a year ago. As the world’s largest cocoa producer, this development matters for global supply.
Adds to the potential upside, NY cocoa futures will join the Bloomberg Commodity Index (BCOM) starting in January, which could attract passive investment from funds that track the index. Citigroup estimates that BCOM inclusion could bring as much as $2 billion of NY cocoa futures buying in the first week of January.
If West Africa experiences favorable weather, yields could improve and supplies may rise, weighing on prices. Farmers in Ivory Coast report a mix of rain and sun aiding flowering, while Ghanaian growers note regular rains supporting pod development ahead of the harmattan season.
A broader expectation of ample global supplies has kept prices under pressure. On November 19, cocoa futures slid to 1.75-year lows as expectations of a bumper West African crop grew. Reports from Ivory Coast farmers indicate healthy trees and favorable drying conditions, and Ghanaian farmers say weather is conducive to rapid pod development.
Mondelez has highlighted a 7% above-average cocoa pod count in West Africa, calling the 2024–25 Ivory Coast main crop harvest start promising in terms of quality. This context has contributed to a softer pricing tone in recent sessions.
The market faced a price-pressing development on November 26 when the European Parliament approved a one-year delay to the EU’s deforestation regulation (EUDR), allowing continued imports from regions with ongoing deforestation. This delay has kept cocoa supplies ample in the near term.
On November 14, prices were pressured after the U.S. moved to drop reciprocal tariffs on non-U.S.-grown commodities, including cocoa, and the 40% tariff on Brazilian food imports. Brazil remains among the top cocoa producers globally.
Weak demand globally remains a bearish factor for cocoa prices. Hershey executives noted softer chocolate sales during Halloween, a period that typically accounts for a substantial portion of annual U.S. candy sales. Regional grindings data also showed contrasting trends: Asia’s cocoa grindings in Q3 fell 17% year over year, Europe’s declined 4.8% year over year, while North American grindings rose 3.2% year over year due to a broader expansion in reporting. Overall, confectionery sales in North America also slowed, down more than 21% year over year for a recent 13-week period.
Nigeria, the world’s fifth-largest cocoa producer, adds another layer of support for prices with a projected 11% year-on-year drop in 2025/26 production to 305,000 metric tons, from an estimated 344,000 tons in 2024/25. September exports from Nigeria were reported unchanged year over year at 14,511 tons.
The ICCO’s May 30 update for 2023/24 showed a global cocoa deficit of 494,000 tons—the largest in more than six decades. For 2024/25, ICCO projects a small surplus of 49,000 tons, the first in four years, with production up 7.4% year over year to about 4.69 million tons.
As always, disclosures: Rich Asplund did not hold positions in the securities discussed at the time of publication. All information is intended for informational purposes. For full disclosures, refer to Barchart’s policy."
