Global cocoa markets are entering a period of heightened volatility, as falling prices reflect a complex interplay of improved supply conditions in West Africa and softening global demand for chocolate.
Benchmark futures declined for the week, with May contracts on the Intercontinental Exchange posting losses in both New York and London. The downturn follows two consecutive weeks of pressure driven largely by expectations of a stronger-than-anticipated harvest across key producing nations.
A major reason for this is the supply narrative of Ivory Coast and Ghana, which together account for more than half of global cocoa output. Farmers in both countries report that consistent rainfall has significantly improved pod development, raising the prospect of a bumper crop in the ongoing season.
This optimism is being reinforced by rising exchange inventories. Stocks monitored by the Intercontinental Exchange (ICE) have climbed to an eight-month high, signaling ample near-term supply and further weighing on prices.
Both governments have responded to the evolving market conditions by reducing payments to farmers. Ghana has slashed its official cocoa price by nearly 30 per cent for the 2025/26 season, while Ivory Coast has announced a steeper 57 per cent cut for its mid-crop harvest now underway.
On the demand side, elevated retail chocolate prices continue to dampen consumption. Industry data from Barry Callebaut AG, the world’s largest bulk chocolate producer, showed a sharp 22 per cent decline in cocoa division sales volumes for the quarter ending November 2025.Â
Additional pressure is emerging from Nigeria, the world’s fifth-largest cocoa producer, where exports have risen significantly. December shipments increased 17 per cent year-on-year, highlighting Nigeria’s growing role in offsetting tighter supplies elsewhere.
However, forward projections lean towards a potential production decline in Nigeria for the 2025/26 season, indicating that the current export strength may not be sustained.
Despite the overall bearish tone, several factors continue to provide underlying support to prices.
Geopolitical tensions surrounding the Strait of Hormuz have disrupted fertilizer flows and increased shipping, insurance, and fuel costs. These pressures are feeding into higher input and logistics costs across the cocoa value chain.
In addition, port arrivals in Ivory Coast are trailing last year’s pace. Cumulative shipments since October are down 2.8 per cent year-on-year, indicating that supply may not be as abundant as early indicators imply.
Forecasts from major institutions present a mixed outlook. The International Cocoa Organization (ICCO) recently raised its 2024/25 surplus estimate, marking the first global surplus in four years, with production rising 8.4 per cent to 4.7 million metric tonnes.
Meanwhile, Rabobank has revised down its surplus projection for 2025/26, while StoneX expects continued surpluses through 2027.
