Just noticed cocoa prices got absolutely hammered on Tuesday - NY futures hit a 2-year low, down over 8%, and London followed suit with similar losses. The whole market seems spooked by one thing: demand just isn't there right now.

The numbers tell the story. Europe's Q4 cocoa grinding data came in way worse than expected, down 8.3% year-over-year when analysts were only looking for a 2.9% drop. Asia's grinding also disappointed at -4.8%, and North America barely moved the needle with just +0.3% growth. Meanwhile, West Africa's harvest is looking solid - bigger pods, healthier crops - which means we're probably looking at bigger cocoa supplies coming to market soon. That's exactly what traders don't want to see when demand is already soft.

Here's the thing though: even with these supply headwinds, cocoa price weakness keeps grinding lower because the real pressure is on the demand side. The International Cocoa Organization downgraded its surplus forecast significantly, and Rabobank cut their 2025/26 outlook too, but none of that seems to matter when buyers just aren't showing up. Inventory levels bounced around a bit but nothing dramatic. Until we see demand pick up, cocoa price action is probably staying under pressure.