Cocoa prices are rising, with May ICE NY cocoa up 1.53% and May ICE London cocoa up 1.50% as they rebound from recent lows. This movement follows an International Cocoa Organization (ICCO) report raising the global 2024/25 cocoa surplus estimate to 75,000 MT from 49,000 MT, marking the first surplus in four years. On April 1, cocoa inventories on ICE reached a six-and-a-half-month high of 2,200,058 bags, fueled by weak global demand and high supply levels.
Despite favorable growing conditions in West Africa leading to expected higher production—up 8.4% year-on-year to 4.7 million MT—cocoa prices are under pressure due to high farm-gate prices in major producing countries like the Ivory Coast and Ghana. Ghana recently cut farm prices by nearly 30%, while the Ivory Coast plans a 57% cut starting in March. Demand concerns are further exacerbated by reported declines in chocolate sales volume and weak grinding statistics; Q4 European cocoa grindings fell 8.3% year-on-year, the worst drop in 12 years.
Shipping costs have increased due to geopolitical tensions, with a slowdown in cocoa deliveries reported. As of March 1, cocoa shipments from Ivory Coast farmers were down 3.6% from the previous year, highlighting ongoing demand issues while new reports indicate that cocoa pod counts are currently 7% above the five-year average.
