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December ICE NY cocoa (CCZ25) on Monday closed down -137 (-2.17%), and December ICE London cocoa #7 (CAZ25) closed down -146 (-3.23%).
Cocoa prices closed sharply lower on Monday amid expectations of a global cocoa surplus driven by favorable West African weather and harvests. 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. The harvest of the Ivory Coast’s main crop has just begun, and farmers are optimistic about its quality. Weather conditions in West Africa are generally favorable except for floods in Cameroon.
Cocoa prices have support from a slowdown in cocoa exports from the Ivory Coast, the world’s largest cocoa producer. Monday’s government data showed that Ivory Coast farmers shipped 215,219 MT of cocoa to ports this new marketing year, from October 1 through October 26, down -24% from 284,633 MT in the same period a year ago.
Tighter cocoa inventories are supportive for prices after ICE-monitored cocoa inventories held in US ports fell to a 7-month low of 1,842,022 bags on Monday.
Weak global cocoa demand is bearish for prices. The Cocoa Association of Asia on October 17 reported that Q3 Asia cocoa grindings fell -17% y/y to 183,413, the smallest grindings for a Q3 in 9 years. The European Cocoa Association on October 16 reported that Q3 European cocoa grindings fell -4.8% y/y to 337,353 MT, the lowest for a third quarter in 10 years. The National Confectioners Association reported that Q3 North American coca grindings rose +3.2% y/y to 112,784 MT, but the addition of new reporting companies skewed the data.
Cocoa prices have been under pressure over the past two months amid fears that high cocoa prices and tariffs could dampen chocolate demand. North American sales volume of chocolate candy was down more than -21% in the 13 weeks ending September 7, compared to the same period last year, according to data from research firm Circana.
Cocoa deliveries in Ghana have surged, weighing on prices. Cocoa arrivals to ports in Ghana in the four weeks ending September 4 reached 50,440 MT compared to about 11,000 MT delivered in the same period in 2024. Ghana is the world’s second-largest producer of cocoa.
A supportive factor for cocoa is lower cocoa production in Nigeria, the world’s fifth-largest cocoa producer. 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. In related news, Nigeria reported that its August cocoa exports rose +15% y/y to 17,239 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 -13.1% y/y to 4.380 MMT. ICCO stated that the 2023/24 global cocoa stocks-to-grindings ratio declined to a 46-year low of 27.0%. For 2024/25, ICCO estimated a global cocoa surplus of 142,000 MT, marking the first surplus in four years. ICCO also said global cocoa production in 2024/25 rose by +7.8% y/y to 4.84 MMT.
