March ICE NY cocoa (CCH26) closed down $297 (-7.24%) on Tuesday, reaching a 2.25-year nearest-futures low, while March ICE London cocoa #7 (CAH26) fell $206 (-6.97%). Over the past six weeks, cocoa prices have plummeted due to an abundance of global supplies and weakened demand, with London cocoa hitting a 2.5-year low on January 30. Key factors include Nigeria’s December cocoa exports rising 17% year-over-year to 54,799 metric tons and a forecasted global cocoa surplus of 287,000 metric tons for the 2025/26 season.
Excess inventories have negatively impacted prices, as ICE cocoa inventories rose to a 3.5-month high of 1,836,511 bags. Demand issues were highlighted by Barry Callebaut AG’s reported 22% decline in cocoa sales volume for the quarter ending November 30, and a significant drop in grindings: Q4 European cocoa grindings decreased 8.3% year-over-year, the largest decline in 12 years. Conversely, cocoa shipments from the Ivory Coast, the world’s largest cocoa producer, totaled 1.27 metric tons in the current marketing year, a 3.8% decline from the previous year, suggesting potential for a tighter supply outlook moving forward.
