On Wednesday, March ICE NY cocoa (CCH26) closed down by 200 points, or 4.30%, while March ICE London cocoa #7 (CAH26) fell by 137 points, or 4.09%. This downturn extended a two-week sell-off, with NY cocoa reaching its lowest point in two years and London cocoa hitting a 2.25-year low, as consumer demand remains weak amid high chocolate prices.
Key reports show significant declines in global cocoa grindings: the European Cocoa Association reported an 8.3% year-on-year drop to 304,470 MT for Q4, the lowest in 12 years, while the Cocoa Association of Asia noted a 4.8% decline to 197,022 MT. Additionally, Barry Callebaut AG, the largest bulk chocolate maker, experienced a 22% decrease in sales volume in its cocoa division. Conversely, cocoa inventories in US ports have risen to a two-month high of 1,741,172 bags, following a low of 1,626,105 bags in late December.
Favorable growing conditions in West Africa are reported to increase the cocoa harvest, with current pod counts 7% above the five-year average. However, a tightening global supply outlook is indicated by the ICCO’s revised surplus estimates, now at 49,000 MT for 2024/25, down from a previous 142,000 MT estimate, amidst a backdrop of declining cocoa production and rising regulatory factors affecting supply.
