Cocoa prices have sharply declined, with March ICE NY cocoa (CCH26) dropping by 108 points (-2.12%) and March ICE London cocoa #7 (CAH26) down by 66 points (-1.77%). This marks the lowest price for NY cocoa in nearly two years and for London cocoa in 1.5 months, driven by weak global demand and significant decreases in cocoa grindings.
The European Cocoa Association revealed that Q4 European cocoa grindings fell by 8.3% year-over-year to 304,470 metric tons, a much larger drop than the anticipated 2.9% decline and the lowest Q4 figure in 12 years. Simultaneously, Asian Q4 cocoa grindings are expected to decline by 12% year-over-year to a decade low. In contrast, North American grindings are projected to see a slight increase, with figures expected later today.
Factors contributing to price support include a tightening global supply outlook, as the International Cocoa Organization cut its global cocoa surplus estimate for 2024/25 to 49,000 metric tons from 142,000 metric tons previously. Additionally, current inventories monitored by ICE in U.S. ports have recently increased to 1,679,045 bags, though they had dipped to a 10-month low earlier.
