Cocoa's been getting hammered lately. March NY cocoa dropped another 42 points today (down 1.16%), and it's now sitting at a 2.25-year low. London cocoa following the same trend, sliding to 2.5-year lows. The story here is pretty straightforward: abundant supplies meeting weak demand.

Inventories are piling up everywhere. ICE cocoa stocks just hit a 4-month high of nearly 1.9 million bags, and global cocoa reserves jumped 4.2% year-over-year to 1.1 million metric tons. Forecasters are calling for surpluses stretching into 2026/27 - StoneX pegging it at 287,000 MT for 2025/26. That kind of abundant supply backdrop doesn't help prices.

Demand's the real problem though. Chocolate makers are struggling - Barry Callebaut, the world's biggest bulk chocolate producer, just reported a 22% drop in cocoa division sales volume last quarter because consumers are backing away from high chocolate prices. Grinding reports across Europe, Asia, and North America all came in weak. European grindings fell 8.3% year-over-year in Q4, the worst quarter in 12 years.

Nigeria's cranking up exports too - cocoa shipments jumped 17% year-over-year in December. Meanwhile, the Ivory Coast (world's largest producer) is actually showing slower deliveries to ports, down 3.8% in the current season. But favorable growing conditions in West Africa are expected to boost harvests, and chocolate makers like Mondelez are noting cocoa pod counts running 7% above the five-year average.

So you've got this tension: abundant near-term supplies crushing prices, but longer-term production concerns in Nigeria could tighten things. For now though, the market's clearly focused on the glut.