London Cocoa Prices Navigate Mixed Territory Amid Global Supply Shifts - Barchart Commodity Analysis

According to Barchart’s latest commodity surveillance, London cocoa futures displayed resilience on Tuesday, gaining +22 points (+1.04%) as sterling weakness provided price support, while New York cocoa faced headwinds from a strengthening dollar. This divergent price action reflects how currency fluctuations continue to shape cocoa valuations across major trading hubs, with London’s performance standing in stark contrast to New York’s retreat of -6 points (-0.20%).

London Cocoa’s Pound-Driven Rally Contrasts with New York’s Dollar Weakness

The currency story dominated Tuesday’s cocoa trading session. London cocoa benefited significantly from the British pound’s decline to a 3-month low relative to the dollar, providing a tailwind for sterling-denominated contracts. Meanwhile, New York cocoa faced pressure as the dollar index surged to a 3.25-month high, making dollar-priced commodities less attractive to international buyers. This currency-driven bifurcation underscores the complex relationship between foreign exchange markets and commodity pricing—a dynamic that Barchart’s commodity analysis team regularly monitors for traders seeking exposure to softs trading.

ICCO’s Revised Surplus Forecast Signals Structural Supply Glut

The International Cocoa Organization (ICCO) recalibrated market expectations on Monday, announcing a global cocoa surplus estimate of 75,000 MT for 2024/25, significantly higher than its November forecast of +49,000 MT. This upward revision represents the first surplus in four years, marking a fundamental shift in the supply-demand balance. The ICCO simultaneously projected that global cocoa production in 2024/25 will climb +8.4% year-over-year to 4.7 MMT, further underscoring ample supply conditions.

Beyond this season, multiple forecasters project extended oversupply. On January 29, StoneX forecasted a global cocoa surplus of 287,000 MT in 2025/26 and 267,000 MT in 2026/27, suggesting structural imbalance will persist. Rabobank later adjusted its 2025/26 surplus estimate downward to 250,000 MT from an earlier forecast of 328,000 MT in November, though the bank still anticipates meaningful excess supply. Simultaneously, the ICCO reported on January 23 that global cocoa stocks expanded +4.2% year-over-year to 1.1 MMT, with ICE cocoa warehouses reaching a 6.5-month high of 2,200,058 bags by Tuesday—accumulating inventory despite weak price levels.

Regional Price Pressures Compound from Top Producers

The Ivory Coast and Ghana, which together supply more than half of the world’s cocoa, have implemented dramatic cuts to official farm-gate prices in an effort to move inventory. Last month, Ghana reduced official cocoa prices by nearly 30% for the 2025/26 growing season supplies, while the Ivory Coast signaled plans for a 35% reduction beginning with its mid-crop harvest in April. Despite these downward price adjustments, international cocoa buyers remain reluctant to commit to purchases at current official pricing, leaving substantial supplies stranded in producing regions.

Weather conditions in West Africa are expected to intensify supply pressures. Tropical General Investments Group recently noted that favorable growing conditions across West Africa are poised to boost the February-March mid-crop cocoa harvest in both the Ivory Coast and Ghana, with farmers reporting larger and healthier pods relative to the prior year. The Ivory Coast’s mid-crop typically accounts for approximately 25% of annual production and is estimated at 400,000 to 450,000 MT for the current season. On a cumulative basis, Ivory Coast farmers shipped 1.34 MMT of cocoa to ports through the current marketing year (October 1, 2025 through March 1, 2026), down -3.6% from 1.39 MMT in the same period a year earlier—one of the few metrics showing production constraints.

Global Cocoa Grindings Stumble as Chocolate Consumers Resist Premium Pricing

Demand-side deterioration has emerged as a principal headwind for cocoa valuations. On January 28, Barry Callebaut AG, the world’s largest bulk chocolate manufacturer, reported a -22% decline in cocoa division sales volume for the quarter ending November 30, citing “negative market demand and a prioritization of volume toward higher-return segments within cocoa.” This demand destruction reflects consumer resistance to elevated chocolate prices that have persisted in the wake of prior cocoa rallies.

Regional grinding data corroborates weak demand conditions. On January 15, the European Cocoa Association reported that Q4 European cocoa grindings contracted -8.3% year-over-year to 304,470 MT, substantially worse than expectations of -2.9% and marking the lowest fourth-quarter performance in 12 years. December data from the Cocoa Association of Asia revealed that Q4 Asian cocoa grindings fell -4.8% year-over-year to 197,022 MT. North American grindings showed scant improvement, with the National Confectioners Association reporting only +0.3% year-over-year growth to 103,117 MT in Q4—a near-stagnant reading. These synchronized declines across major consuming regions signal entrenched demand weakness rather than localized softness.

Chocolate manufacturers’ own assessments reinforce the demand narrative. Mondelez recently observed that the latest cocoa pod count in West Africa stands 7% above the five-year average and is “materially higher” relative to last year’s crop—adding to supply anxieties even as processors pare consumption.

Shipping Disruptions and Nigerian Export Surges Test Support Levels

Limited bullish factors provide cocoa prices with modest cushions. Geopolitical tensions have disrupted global shipping through the Strait of Hormuz following the war in Iran, which halted most maritime traffic through this critical chokepoint. The resulting supply chain friction has boosted global shipping rates, insurance premiums, and fuel costs, thereby inflating cocoa importers’ total landed costs. Higher transportation expenses have slightly supported cocoa prices by reducing delivered supply volumes from major producers.

Port throughput trends in the Ivory Coast offer additional evidence of delivery constraints. Slowing cocoa shipments to Ivorian ports provide modest price support, though the volume trends remain challenging relative to year-ago comparisons. However, Nigeria, the world’s fifth-largest cocoa producer, has partially offset supply tightness through elevated exports. On February 17, Bloomberg reported that Nigerian December cocoa exports surged +17% year-over-year to 54,799 MT. Nigeria’s Cocoa Association, meanwhile, projects 2025/26 cocoa production will decline -11% year-over-year to 305,000 MT from a projected 344,000 MT in 2024/25—a notable contraction that could eventually support pricing if realized.

The Ivory Coast projects even steeper production declines, forecasting 2025/26 cocoa output will fall -10.8% year-over-year to 1.65 MMT from 1.85 MMT in 2024/25. Should these production forecasts materialize, structural supply tightening could emerge by late 2025 or 2026, potentially providing longer-term support to cocoa valuations. However, current market dynamics remain dominated by near-term oversupply and demand destruction, keeping Barchart’s commodity analysts cautious on medium-term cocoa prospects despite distant supply potential.