**Cocoa Prices Decline Amid Supply Glut and Demand Concerns**
On January 25, 2023, cocoa prices dropped significantly, with March ICE NY cocoa closing down $283 (-6.38%) and March ICE London cocoa #7 down $208 (-6.72%), reaching a 2.25-year low. The decline stems from both abundant global supplies, including a 4.2% year-on-year increase in global cocoa stocks to 1.1 million metric tons for the 2024/25 season, and decreasing demand from consumers reluctant to pay high chocolate prices.
Barry Callebaut AG reported a 22% drop in cocoa sales volume for the quarter ending November 30, highlighting the adverse market conditions. Additionally, European cocoa grindings fell 8.3% year-on-year in Q4 2022, the sharpest drop in 12 years. The International Cocoa Organization (ICCO) noted a revised global cocoa deficit of 494,000 metric tons for 2023/24, while production is expected to rise by 7.4% to 4.69 million metric tons in 2024/25, despite lower supply estimates from Nigeria, which experienced a 7% decline in cocoa exports in November 2022.
