Cocoa prices plummeted today, with March ICE NY cocoa (CCH26) down 9.44% to $4,575 and March ICE London cocoa #7 (CAH26) down 9.21% to $3,313, marking two-year and 2.25-year lows in nearest-futures prices, respectively. This decline is attributed to concerns over weak global demand leading to larger cocoa surpluses, exacerbated by disappointing Q4 grinding data from Europe.
The European Cocoa Association reported a significant 8.3% year-over-year drop in Q4 European cocoa grindings, totaling 304,470 MT, the worst for a Q4 in 12 years. In Asia, grindings fell 4.8% to 197,022 MT, while North American grindings saw only a minimal increase of 0.3% to 103,117 MT. Meanwhile, positive news from the Ivory Coast highlights a larger cocoa harvest, with pod counts 7% above the five-year average.
Despite weaker demand, tightening global supply supports prices, as the International Cocoa Organization (ICCO) recently revised its global 2024/25 cocoa surplus estimate down to 49,000 MT. Additionally, cocoa inventories in U.S. ports have fluctuated, reaching a recent high of 1,680,417 bags, contributing to an uncertain pricing outlook ahead.
