Global Cocoa Price Weakness Deepens as Supply Surge Meets Demand Collapse

Cocoa prices extended their sharp downward trajectory this week, with March ICE NY cocoa closing down 43 points (-1.13%) and March ICE London cocoa declining 14 points (-0.51%). The retreat marks a continuation of a six-week losing streak, bringing NY cocoa to its lowest level in 2.25 years and London cocoa to a 2.5-year bottom. The convergence of massive global supplies and significantly subdued demand has created a perfect storm for cocoa price weakness, fundamentally reshaping the market landscape.

Oversupply Pressures Cocoa Prices as Global Stocks Reach Critical Levels

The cocoa price decline is being driven primarily by an unprecedented abundance of global supplies. On January 29, StoneX projected a global cocoa surplus of 287,000 MT for the 2025/26 season, followed by an even larger 267,000 MT surplus anticipated for 2026/27. Meanwhile, the International Cocoa Organization (ICCO) reported on January 23 that worldwide cocoa stocks climbed 4.2% year-over-year to 1.1 MMT, underscoring the structural oversupply challenge.

The pressure intensifies when examining ICE-monitored inventory levels. Cocoa inventories surged to a 3.75-month high of 1,871,034 bags, reflecting the market’s struggle to absorb available supplies. This elevated inventory backdrop represents a significant headwind for cocoa price recovery in the near term.

Chocolate Manufacturers Signal Demand Capitulation

Beyond supply considerations, demand weakness has become the second major force depressing cocoa prices. Consumers worldwide are resisting elevated chocolate prices, forcing major manufacturers to reassess their market strategies. Barry Callebaut AG, the world’s largest bulk chocolate maker, reported on January 28 a stark 22% decline in sales volume within its cocoa division for the quarter ending November 30. The company explicitly attributed the downturn to “negative market demand and a prioritization of volume toward higher-return segments within cocoa,” signaling a deliberate retreat from price-sensitive cocoa products.

Grinding data across major consumption regions paints an equally troubling picture. The European Cocoa Association disclosed on January 15 that Q4 European cocoa grindings fell 8.3% year-over-year to 304,470 MT—substantially worse than anticipated declines of 2.9% and representing the weakest Q4 performance in 12 years. Asian markets showed similar weakness, with the Cocoa Association of Asia reporting on December 16 that Q4 Asian cocoa grindings declined 4.8% year-over-year to 197,022 MT. North American performance offered little relief, as the National Confectioners Association reported Q4 cocoa grindings rose a meager 0.3% year-over-year to 103,117 MT.

Regional Production Dynamics Add Complexity to Cocoa Price Outlook

The supply picture becomes more nuanced when examining regional production patterns. Nigerian exports have accelerated sharply—Bloomberg reported on Tuesday that December Nigerian cocoa exports surged 17% year-over-year to 54,799 MT, adding to global supply pressures and further weighing on cocoa prices.

By contrast, the Ivory Coast, the world’s largest cocoa producer, has moderated its shipments. Cumulative marketing year data (October 1, 2025, through February 8, 2026) showed that Ivory Coast farmers delivered 1.27 MMT of cocoa to ports, representing a 3.8% decline from 1.32 MMT during the identical prior-year period. This slowdown provides modest support but insufficient to counter the broader supply surge.

Prospects for the current harvest cycle appear mixed. Favorable growing conditions across West Africa have encouraged farmers, with Tropical General Investments Group noting that ideal climatic conditions are expected to boost February-March cocoa harvests in both the Ivory Coast and Ghana as farmers report larger and healthier pods compared to the prior year. Chocolate manufacturer Mondelez corroborated this outlook, stating that the latest cocoa pod count in West Africa stands 7% above the five-year average and is “materially higher” than last year’s production. The Ivory Coast’s main crop harvest is now underway, with farmers expressing optimism regarding quality. However, this production strength creates a paradox: improved supplies may provide additional downward pressure on cocoa prices unless demand dynamics shift materially.

Market Support Factors Offer Limited Relief

On the positive side, some structural factors could support cocoa prices going forward. Nigeria’s Cocoa Association projects that Nigerian cocoa production in 2025/26 will decline 11% year-over-year to 305,000 MT from 344,000 MT in 2024/25, suggesting at least one major producing region faces tightening supplies ahead.

The broader production outlook also contains cautionary notes for those betting on cocoa price weakness to persist indefinitely. On November 28, ICCO trimmed its 2024/25 global cocoa surplus estimate to 49,000 MT from a prior projection of 142,000 MT while simultaneously reducing its global cocoa production estimate for 2024/25 to 4.69 MMT from 4.84 MMT. Rabobank, in its most recent assessment, cut its 2025/26 global cocoa surplus projection to 250,000 MT from its November forecast of 328,000 MT.

Context from recent history underscores how dramatically market conditions can shift. In May 2025, ICCO had revised its 2023/24 global cocoa deficit to a staggering negative 494,000 MT—the largest deficit recorded in over 60 years, with production plummeting 12.9% year-over-year to 4.368 MMT. By December 19, ICCO estimated that the 2024/25 season would generate the first global cocoa surplus in four years at 49,000 MT, supported by a 7.4% year-over-year production increase to 4.69 MMT. This dramatic reversal from severe deficit to surplus in just 18 months reveals how vulnerable cocoa price stability remains to production and demand shifts—underscoring why current cocoa price weakness may represent a cyclical correction within a longer-term pattern of structural volatility.