On Monday, December ICE NY cocoa (CCZ25) closed up by +90 (+1.30%), while December ICE London cocoa #7 (CAZ25) saw an increase of +31 (+0.64%).
Cocoa prices experienced a rise on Monday, buoyed by indications of a slowdown in cocoa exports from the Ivory Coast, the world’s leading cocoa producer. Recent government data revealed that farmers in the Ivory Coast shipped 1.82 million metric tons (MMT) of cocoa to ports from October 1 to September 28. This figure represents a 3.4% increase from the previous year but is significantly lower than the +35% increase recorded in December.
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The tightening of cocoa inventories has also provided support for prices, as ICE-monitored cocoa stocks in U.S. ports fell to a five-month low of 1,980,232 bags last Friday. However, cocoa prices have faced downward pressure over the past seven weeks due to concerns that elevated cocoa prices and tariffs might negatively impact chocolate demand. Last Friday, London cocoa reached a 2.5-month low, while NY cocoa hit an 11-month low the previous Tuesday. Notably, chocolate manufacturer Lindt & Sprüngli AG revised its margin guidance downward in July, citing a larger-than-expected decline in first-half chocolate sales. Similarly, Barry Callebaut AG cut its sales volume guidance for the second time in three months, attributing this to persistently high cocoa prices, with a reported -9.5% drop in sales volume for the March-May period—the largest quarterly decline in a decade.
Looking ahead, the forecast for an improved cocoa crop in the Ivory Coast this year presents a bearish outlook for prices. Mondelez recently reported that the latest cocoa pod count in West Africa is 7% above the five-year average and “materially higher” than last year’s crop. The harvest of the Ivory Coast’s main crop is set to commence next month, with farmers expressing optimism about its quality.
Previously, cocoa prices surged to over two-year highs last month due to concerns that cold and dry weather in West Africa’s cocoa-producing regions was hindering plant development in the Ivory Coast and exacerbating black pod disease in Ghana and Nigeria. According to the Commodity Weather Group, the past 60 days have been the driest on record for West Africa cocoa since 1979. This lack of rainfall could affect the retention of cocoa pods on trees ahead of the main crop harvest starting in October.
Quality concerns surrounding the Ivory Coast’s mid-crop cocoa, currently being harvested through September, are also supportive of prices. Rabobank noted that the poor quality of the mid-crop is partly due to late-arriving rain, which limited crop growth. The mid-crop, typically the smaller of the two annual cocoa harvests, is expected to yield around 400,000 MT this year, down 9% from last year’s 440,000 MT.
Additionally, a decline in cocoa production in Nigeria, the world’s fifth-largest cocoa producer, is another supportive factor. The Cocoa Association of Nigeria projects a -11% year-on-year decrease in cocoa production for the 2025/26 crop year, estimating it will fall to 305,000 MT from 344,000 MT in 2024/25. In July, Nigeria reported a -22% year-on-year drop in cocoa exports, totaling 13,579 MT.
Weak global cocoa demand has been a bearish influence on cocoa prices. The European Cocoa Association reported a -7.2% year-on-year decline in Q2 European cocoa grindings, totaling 331,762 MT, which was worse than the anticipated -5% drop. Similarly, the Cocoa Association of Asia noted a -16.3% year-on-year decline in Q2 cocoa grindings, marking the lowest amount for a Q2 in eight years. North American Q2 cocoa grindings also fell, albeit by a smaller margin of -2.8% year-on-year to 101,865 MT.
In contrast, Ghana’s projected increase in cocoa production is bearish for cocoa prices. On July 1, the Ghana Cocoa Board forecasted an +8.3% year-on-year rise in the 2025/26 cocoa crop, estimating it will reach 650,000 MT, up from 600,000 MT in 2024/25.
On May 30, the International Cocoa Organization (ICCO) revised its 2023/24 global cocoa deficit to -494,000 MT, up from a previous estimate of -441,000 MT, marking the largest deficit in over 60 years. The ICCO indicated that global cocoa production is expected to decline by 13.1% year-on-year to 4.380 MMT, with the stocks-to-grindings ratio dropping to a 46-year low of 27.0%. Looking ahead to 2024/25, the ICCO forecasts a global cocoa surplus of 142,000 MT, marking the first surplus in four years, with production projected to rise by +7.8% year-on-year to 4.84 MMT.
On the date of publication,
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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