Global Cocoa Market News: Surging Supplies and Fading Appetite Weigh on Prices

Cocoa market participants faced mounting headwinds this week as futures prices retreated amid a confluence of negative factors. May ICE NY cocoa closed Monday down 75 points (-2.36%), while March ICE London cocoa dropped 78 points (-3.45%). Though prices pulled back, they managed to hold above last week’s 2.75-year lows, signaling ongoing volatility in what has become an increasingly challenging cocoa market environment.

The fundamental weakness stems from a structural mismatch between supply and demand dynamics. Producers in West Africa—particularly the Ivory Coast and Ghana, which account for over half of global cocoa output—have become reluctant to sell at official farm-gate prices that vastly exceed current world market levels. This pricing disconnect has paradoxically boosted available supplies rather than restricting them. Cocoa market inventories reached a 5.25-month high of 2,111,554 bags last Friday, according to ICE data, reflecting the build-up of unsold cocoa beans in the pipeline.

Supply Glut Pressures Cocoa Market as Inventory Climbs

The supply picture deteriorated further when major producing nations opted to slash official cocoa prices. Ghana implemented a nearly 30% cut to farmer payments for the 2025/26 growing season, while the Ivory Coast signaled a potential 35% reduction set to take effect when mid-crop harvesting begins in April. These dramatic price cuts underscore the urgency to move inventory and stabilize the cocoa market.

Forecasters are grappling with mounting surplus projections. StoneX projected a global cocoa surplus of 287,000 MT for 2025/26, with an additional 267,000 MT surplus anticipated for 2026/27. The International Cocoa Organization reported that global cocoa stocks climbed 4.2% year-over-year to 1.1 MMT as of late January. Complicating the cocoa market picture further, production forecasts suggest robust harvests will continue. Tropical General Investments Group noted that favorable growing conditions across West Africa are positioning the February-March cocoa harvest for strong output. Mondelez reported that pod counts in the region are running 7% above the five-year average and materially higher than last year’s crop.

Demand Woes Hit Cocoa Market as Consumers Shy Away from Chocolate

Consumer reluctance to pay elevated chocolate prices has crushed demand across the supply chain. Barry Callebaut, the world’s largest bulk chocolate manufacturer, reported a staggering 22% decline in sales volume within its cocoa division for the quarter ending November 30. The company cited “negative market demand and a prioritization of volume toward higher-return segments within cocoa” as the primary drivers of this weakness.

Grinding data paints an equally bleak picture for cocoa market demand. European cocoa grindings fell 8.3% year-over-year in Q4 to 304,470 MT—not only below expectations of a 2.9% decline but also marking the lowest Q4 performance in 12 years. Asian cocoa grindings were equally soft, dropping 4.8% year-over-year to 197,022 MT in Q4. North American grindings showed minimal resilience, rising just 0.3% year-over-year to 103,117 MT, suggesting cocoa market weakness is truly global in scope.

Export Surge and Production Adjustments Shape Cocoa Market Outlook

Nigeria, the world’s fifth-largest cocoa producer, has ramped up export activity, further adding to cocoa market supply pressures. Nigerian cocoa exports surged 17% year-over-year in December to 54,799 MT, flooding the market with additional beans when demand is already tepid.

However, the cocoa market does have some stabilizing factors. The Ivory Coast projects production will decline 10.8% year-over-year in 2025/26 to 1.65 MMT from 1.85 MMT in the prior year, offering modest supply relief. Port deliveries from the Ivory Coast have also slowed—cumulative shipments through February 22, 2026 reached 1.31 MMT, down 3.7% from 1.36 MMT in the corresponding period last year. Nigeria’s Cocoa Association anticipates an 11% year-over-year production drop to 305,000 MT for 2025/26, though this modest supply constraint may prove insufficient to offset the global surplus.

The International Cocoa Organization previously estimated a 2024/25 global cocoa surplus of 49,000 MT—marking the first surplus in four years—while noting that 2024/25 global production rose 7.4% year-over-year to 4.69 MMT. More recently, Rabobank trimmed its 2025/26 global cocoa surplus forecast to 250,000 MT from its November projection of 328,000 MT, a welcome reduction but still indicating substantial oversupply.

Market Outlook for Cocoa Participants

The cocoa market remains locked in a seven-week downtrend with little relief in sight. The convergence of abundant supplies, slowing demand, and favorable growing conditions continues to pressure prices while testing the resolve of cocoa market participants. While production declines in certain regions offer a glimmer of hope, they appear insufficient to counterbalance the structural headwinds currently dominating cocoa market sentiment. Market observers will be watching intently for any shifts in consumer appetite or supply management policies that might alter the cocoa market’s trajectory in the coming months.