Cocoa Market in Freefall: Why Global Buyers Remain Reluctant at Current Prices

The cocoa market experienced a dramatic sell-off in March, with ICE NY futures for March delivery (CCH26) dropping 139 points (-4.11%) and ICE London’s March contract (CAH26) plunging 158 points (-6.48%). These moves pushed cocoa to its lowest levels in 2.5 years for New York and 2.75 years for London. The fundamental issue driving this collapse isn’t scarcity—it’s the opposite.

Sharp Price Plunges Reflect Buyers’ Reluctance

International cocoa purchasers have become increasingly reluctant to commit to deals at the official asking prices set by West Africa’s largest producing nations. Ghana recently shocked the market by cutting farmer payments by nearly 30% for the upcoming 2025/26 season, signaling to the world that even producers don’t believe current valuations will hold. The Ivory Coast, which combined with Ghana controls more than half of global cocoa supplies, is reportedly considering a comparable reduction. Buyers are playing a waiting game, betting that further concessions will come.

Oversupply Crushes Market Sentiment

The math is brutal for cocoa bulls. StoneX forecasted in late January that global production will exceed demand by 287,000 metric tons in 2025/26, with another 267,000 MT surplus projected for 2026/27. The International Cocoa Organization reported that stockpiles swelled 4.2% year-over-year to 1.1 million metric tons as of late January. On ICE’s monitored warehouses, inventories hit 1,942,367 bags—a level unseen in over four months.

This supply overhang has put sustained pressure on prices. Buyers recognize that physical cocoa isn’t going anywhere; waiting for cheaper prices costs them little while potentially saving them millions.

Chocolate Demand Collapses as Consumers Resist Higher Prices

Here’s where the reluctance extends beyond buyers to end consumers. Barry Callebaut, the world’s largest chocolate manufacturer, reported a 22% volume decline in its cocoa division for the quarter ending November 30, citing weak market demand as consumers have become increasingly price-sensitive. Industrial grinding data tells the same story across regions.

European cocoa grinding fell 8.3% year-over-year in Q4 to 304,470 MT—well below the expected 2.9% decline and the worst performance for a fourth quarter in 12 years. Asia’s grinding activity dropped 4.8% to 197,022 MT, while North America managed only a 0.3% gain to 103,117 MT. The message is clear: higher cocoa prices have priced out demand at every processing level.

West African Production Surge Amplifies Pressure

Production dynamics in the world’s cocoa heartland are making matters worse. Tropical General Investments Group noted that West African growing conditions remain favorable heading into the February-March harvest, with farmers reporting larger and healthier pods than a year earlier. Mondelez confirmed this optimistic supply picture, noting that the pod count in West Africa is 7% above the five-year average and materially higher than last year’s crop.

Nigeria, the world’s fifth-largest cocoa producer, is also flooding the market. Exports from Nigeria jumped 17% year-over-year in December to 54,799 MT. However, there’s one small counter-current: deliveries to Ivory Coast ports have slowed, reaching 1.30 million MT in the current marketing year (October 2025 through mid-February)—down 3% from the same period a year ago.

Looking ahead, Nigeria’s Cocoa Association projects its own 2025/26 production will contract 11% to 305,000 MT, offering a modest silver lining. But this decline won’t offset the global surplus of beans and the reluctance of buyers to absorb overpriced inventory.

Limited Price Support on the Horizon

The one factor potentially supporting prices is the tightening supply forecast for the current 2024/25 season. The ICCO significantly trimmed its global surplus estimate in November to just 49,000 MT from a previous 142,000 MT, and it also lowered 2024/25 production expectations to 4.69 million MT. Rabobank similarly cut its 2025/26 surplus projection to 250,000 MT from an earlier 328,000 MT forecast.

Historically, these numbers would normally inspire confidence. The 2023/24 season recorded a deficit of 494,000 MT—the largest in over 60 years—that drove prices much higher. Yet even as the market has shifted back toward nominal surpluses for the first time in four years, buyers remain reluctant to jump in at current levels. The psychological shift from scarcity to abundance has fundamentally altered buyer behavior, and until prices fall to levels that can absorb global supplies without warehouses overflowing, that reluctance is unlikely to fade.