On Friday, December ICE NY cocoa (CCZ25) closed down by 1.32% at -103, while September ICE London cocoa #7 (CAU25) decreased by 0.99% at -53. Concerns over high cocoa prices and tariffs potentially dampening chocolate demand contributed to the retreat, with Lindt & Sprüngli AG and Barry Callebaut AG both reporting declines in sales volume and lowering margin guidance due to these pressures.
Despite the price drop, tighter inventories have helped limit losses; ICE-monitored cocoa inventories in U.S. ports fell to a 3.25-month low of 2,160,401 bags. The Ivory Coast is experiencing adverse weather conditions, which have the potential to impact cocoa pod retention before the main harvest in October, with recent reports noting a 5.9% year-over-year increase in shipments but a slowdown compared to prior months.
The global cocoa market is also facing a significant deficit, estimated at 494,000 MT for 2023/24, after a 13.1% decrease in worldwide cocoa production down to 4.38 million metric tons, according to the International Cocoa Organization. The association predicts a return to surplus in 2024/25, forecasting a rise in production by 7.8% year-over-year.
