Onome Amuge

Cocoa futures retreated for a second straight session on Friday as concerns mounted that persistently high prices, coupled with tariff pressures, could further erode global chocolate demand.

December New York cocoa closed down $103, or 1.3 per cent, at $7,673 a tonne, while September London cocoa slipped £53, or 1 per cent, to £5,318. The pullback follows a recent rally to two-month highs earlier in August, driven by adverse weather in West Africa and supply chain disruptions.

The latest weakness reflects mounting evidence that record-high cocoa prices are weighing on consumption. Swiss chocolatier Lindt & Sprüngli cut its full-year margin guidance in July after reporting a sharper-than-expected fall in first-half chocolate sales. Barry Callebaut, the world’s largest bulk chocolate producer, has also issued two sales volume downgrades in three months, citing sustained raw material costs. The Zurich-based company warned that annual volumes will fall, after recording a 9.5 per cent drop in the March-May quarter, its heaviest decline in more than a decade.

“Demand elasticity is beginning to show through the retail channel. High shelf prices are prompting consumers to cut back, and manufacturers are responding by trimming output. That dynamic is finally feeding back into the futures market,”said an European commodities analyst.

Even so, traders cautioned that any further downside in cocoa prices could be limited by tightening physical supply. Exchange-monitored inventories in US ports fell to a 3.25-month low of 2.16 million bags on Friday.

Underlying fundamentals in West Africa, home to more than 60 per cent of global cocoa production, remain precarious. Earlier this month prices were lifted by reports of unusually cold and dry conditions across the region, particularly in Côte d’Ivoire, the world’s top grower. Data from the Commodity Weather Group showed that the 30 days to August 15 marked the driest period in the country for 46 years. The lack of rainfall threatens pod retention ahead of the main crop harvest beginning in October, while also fuelling black pod disease in Ghana and Nigeria.

Export trends from Abidjan also point to a moderation in supply. Côte d’Ivoire farmers have shipped 1.79 million tonnes to ports so far this season, up nearly 6 per cent year-on-year but a sharp deceleration from the 35 per cent growth pace seen in December.

Concerns over bean quality are adding to market uncertainty. Processors report that 5 to 6 per cent of mid-crop deliveries are failing quality checks, compared with about 1 per cent during the larger main crop. Truckloads have been rejected outright, with late-season rains blamed for stunting bean development. Rabobank estimates the country’s mid-crop will come in at 400,000 tonnes this year, down 9 per cent from last year’s 440,000 tonnes.

Nigeria, the fifth-largest global supplier, is also facing a weaker outlook. The Cocoa Association of Nigeria projects 2025/26 output at 305,000 tonnes, an 11 per cent year-on-year decline. Exports in June ticked up 0.9 per cent to 14,597 tonnes, but industry officials warn that rising disease prevalence and ageing trees will cap near-term recovery.