Cocoa's been getting hammered lately. NY and London futures both dropped hard this week, hitting multi-year lows. I've been watching the grinding symbol data closely, and honestly, it's telling a pretty clear story about what's happening in this market.

The demand side looks rough. Barry Callebaut, the massive chocolate manufacturer, just reported a -22% drop in cocoa division sales volume last quarter. Even worse, European cocoa grindings fell -8.3% year-over-year in Q4 to 304,470 MT, way worse than the expected -2.9% decline. Asian grindings also slipped -4.8%, while North America barely budged at +0.3%. When you see those grinding numbers across regions all pointing down like this, it's a red flag for cocoa demand.

On the supply side, it's a different story. Global cocoa stocks jumped 4.2% year-over-year, and ICE inventories just hit a 4-month high. Nigeria's pumping out more cocoa too, with December exports up 17% year-over-year. The Ivory Coast is shipping less though, down 3.8% compared to last year, but that's not enough to offset everything else.

Forecasters are painting a picture of oversupply stretching into next year. StoneX sees a 287,000 MT surplus coming in 2025/26. West African weather's been favorable too, which means bigger harvests ahead. Some positive noise about Nigeria's production potentially falling 11%, but it's getting drowned out by the bigger supply picture.

Prices look like they could stay under pressure until we see real demand recovery. Right now, consumers are just too price-sensitive to drive any meaningful support.