Cocoa Prices Settle Mixed on Currency Fluctuations

Could ICE NY cocoa (CCK26) on Tuesday closed down -6 (-0.20%), and Could ICE London cocoa #7 (CAK26) closed up +22 (+1.04%).

Cocoa costs are settled blended on Tuesday as foreign money fluctuations affected costs.  Tuesday’s rally within the greenback index ($DXY) to a 3.25-month excessive undercut NY cocoa, whereas Tuesday’s decline within the British pound (^GBPUSD) to a 3-month low boosted London cocoa.  

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On Monday, Could NY cocoa posted a contract low, and nearest-futures London cocoa (H26) fell to a 3-year low after the Worldwide Cocoa Group (ICCO) raised its world 2024/25 cocoa surplus estimate to 75,000 MT from a November forecast of +49,000 MT, the primary surplus in 4 years.  The ICCO additionally forecasts world cocoa manufacturing in 2024/25 will climb by +8.4% y/y to 4.7 MMT.

Cocoa costs are within the midst of a seven-week-long downtrend, with NY cocoa falling to a 2.75-year low final Friday amid strong world provides and slack demand.  On January 29, StoneX forecasted a world cocoa surplus of 287,000 MT within the 2025/26 season and a 267,000 MT surplus for 2026/27.  Additionally, the Worldwide Cocoa Group (ICCO) reported on January 23 that world cocoa shares rose +4.2% y/y to 1.1 MMT.

Worldwide cocoa patrons are reluctant to pay official farm-gate costs within the Ivory Coast and Ghana, that are effectively above present world costs.  The dearth of patrons is boosting provides as ICE cocoa inventories rose to a 6.5-month excessive of two,200,058 luggage on Tuesday.

Final month, Ghana reduce the official value it pays its cocoa farmers by practically 30% for provides for the 2025/26 rising season, and the Ivory Coast mentioned it was contemplating a 35% reduce in costs that might kick in for the mid-crop harvest that begins in April.  The Ivory Coast and Ghana produce greater than half of the world’s cocoa.  

Favorable rising situations in West Africa are additionally a damaging issue for cocoa costs.  Tropical Normal Investments Group just lately mentioned that favorable rising situations in West Africa are anticipated to spice up the February-March mid-crop cocoa harvest within the Ivory Coast and Ghana, as farmers report bigger and more healthy pods in contrast with the identical interval final 12 months.  The Ivory Coast mid-crop accounts for about 25% of annual manufacturing and is estimated at 400,000 to 450,000 MT this 12 months.  

Cocoa has help amid considerations that increased transport prices will curb cocoa exports and restrict provides.  The conflict in Iran has halted most transport site visitors by way of the Strait of Hormuz, boosting world transport charges, insurance coverage, and gasoline prices, thereby elevating cocoa importers’ prices.

Slowing cocoa deliveries to ports within the Ivory Coast can also be supportive of costs.  Monday’s cumulative knowledge from the Ivory Coast reveals that Ivory Coast farmers shipped 1.34 MMT of cocoa to ports within the present advertising 12 months (October 1, 2025, by way of March 1, 2026), down -3.6% from 1.39 MMT in the identical interval a 12 months in the past.  

Demand considerations have hammered cocoa costs as customers proceed to balk on the excessive value of chocolate.  On January 28, Barry Callebaut AG, the world’s largest bulk chocolate maker, reported a -22% decline in gross sales quantity in its cocoa division for the quarter ending November 30, citing “damaging market demand and a prioritization of quantity towards higher-return segments inside cocoa.”

Grinding experiences additionally confirmed weak demand.  On January 15, the European Cocoa Affiliation reported that This fall European cocoa grindings fell -8.3% y/y to 304,470 MT, a much bigger decline than expectations of -2.9% y/y and the bottom for a This fall in 12 years.  On December 16, the Cocoa Affiliation of Asia reported that This fall Asian cocoa grindings fell -4.8% y/y to 197,022 MT.  Additionally, the Nationwide Confectioners Affiliation reported This fall North American cocoa grindings rose solely +0.3% y/y to 103,117 MT.

Chocolate maker Mondelez just lately mentioned that the newest cocoa pod depend in West Africa is 7% above the five-year common and “materially increased” than final 12 months’s crop.  Harvest of the Ivory Coast’s principal crop has begun, and farmers are optimistic about its high quality.

Additionally undercutting cocoa costs are increased exports from Nigeria, the world’s fifth-largest cocoa producer.  On February 17, Bloomberg reported that Nigerian Dec cocoa exports rose +17% y/y to 54,799 MT.  Nigeria’s Cocoa Affiliation tasks that Nigerian cocoa manufacturing in 2025/26 will fall by -11% y/y to 305,000 MT, from a projected 344,000 MT for the 2024/25 crop 12 months.  

On the bullish facet, the Ivory Coast tasks cocoa manufacturing in 2025/26 to fall -10.8% y/y to 1.65 MMT from 1.85 MMT in 2024/25.  On February 10, Rabobank additionally reduce its 2025/26 world cocoa surplus estimate to 250,000 MT from a November forecast of 328,000 MT. 

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