Favorable West African Weather and Ample Supplies Undercut Cocoa Prices

Might ICE NY cocoa (CCK26) on Thursday closed down -114 (-3.32%), and Might ICE London cocoa #7 (CAK26) closed down -79 (-3.18%).

Cocoa costs settled sharply decrease on Thursday amid optimism that rain in West Africa will enhance cocoa crop yields.  Climate forecaster Vaisala stated it expects rainfall to proceed into subsequent week for many of West Africa, which ought to assist cocoa crop flowering.

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Ample provides are additionally weighing on cocoa costs as ICE cocoa inventories rose to a 7-month excessive of two,251,404 baggage on Thursday.

NY cocoa rallied to a 3-week excessive on Wednesday after a Reuters report on Tuesday stated that native grinders purchased greater than 400,000 metric tons of Ivory Coast cocoa export contracts within the 10 days since purchases resumed for the mid-year crop.  That steered that new demand is rising within the wake of latest cocoa value cuts.  Final month, Ghana minimize the official value it pays its cocoa farmers by almost 30% for provides for the 2025/26 rising season, and the Ivory Coast final Wednesday stated it might minimize cocoa farmer pay by 57% that might kick in for the mid-crop harvest that began in March.  The Ivory Coast and Ghana produce greater than half of the world’s cocoa.

Cocoa costs have additionally seen some assist since final week because the closure of the Strait of Hormuz has boosted international transport charges, insurance coverage prices, and gasoline costs, thereby elevating cocoa importers’ prices.

As well as, slowing cocoa deliveries to ports within the Ivory Coast is supportive of costs.  Monday’s cumulative information from the Ivory Coast confirmed that Ivory Coast farmers shipped 1.35 MMT of cocoa to ports within the present advertising yr (October 1, 2025, via March 1, 2026), down -3.6% from 1.40 MMT in the identical interval a yr in the past.  

Demand issues have hammered cocoa costs as shoppers 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 “destructive market demand and a prioritization of quantity towards higher-return segments inside cocoa.”

Grinding reviews additionally confirmed weak demand.  On January 15, the European Cocoa Affiliation reported that This autumn 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 autumn in 12 years.  On December 16, the Cocoa Affiliation of Asia reported that This autumn Asian cocoa grindings fell -4.8% y/y to 197,022 MT.  Additionally, the Nationwide Confectioners Affiliation reported This autumn North American cocoa grindings rose solely +0.3% y/y to 103,117 MT.

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 yr.  

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

As a bearish issue, the Worldwide Cocoa Group (ICCO) on March 2 raised its international 2024/25 cocoa surplus estimate to 75,000 MT from 49,000 MT in November, which was the primary surplus in 4 years.  ICCO estimated that international cocoa manufacturing in 2024/25 climbed by +8.4% y/y to 4.7 MMT.  Trying forward, StoneX on January 29 forecasted a worldwide cocoa surplus of 287,000 MT within the 2025/26 season and a 267,000 MT surplus for 2026/27. 

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