Cocoa Market Pressured by Surplus Supply and Weak Demand: Barchart Analyzes the Global Shift

Recent market movements reveal a structural challenge facing the global cocoa industry: abundant supplies colliding with tepid consumer demand. According to barchart commodity analysis and industry data, cocoa prices have retreated sharply as inventories surge to levels unseen in over five years, while chocolate manufacturers grapple with declining consumption worldwide.

Global Cocoa Supplies Reach Multi-Year Highs

ICE NY cocoa futures fell by 2.36% in May trading, while ICE London cocoa declined 3.45%, marking the latest declines in what analysts describe as a seven-week downtrend. The weakness reflects a fundamental supply-demand imbalance that shows no signs of easing.

Storage levels tell the story clearly. As of last Friday, ICE cocoa inventories climbed to 2,111,554 bags—a 5.25-month high that signals hesitant international buyers are passing on cocoa beans from major producers. In the Ivory Coast and Ghana, which together supply more than half of the world’s cocoa, official farm-gate prices remain significantly elevated above current world market rates. This pricing disconnect has deterred purchasing activity, allowing inventories to accumulate.

The inventory buildup is being reinforced by production realities on the ground. West African growing conditions have proven favorable, with pod counts running approximately 7% above five-year averages and substantially higher than the prior year’s crop. Farmers report larger and healthier pods across the Ivory Coast and Ghana, while the main crop harvest is proceeding with quality expectations remaining positive. Nigeria, the world’s fifth-largest cocoa producer, has added to global supplies with December exports rising 17% year-over-year to 54,799 metric tons.

Industry Demand Remains Sluggish Across All Regions

Weak demand from chocolate manufacturers represents the other half of the cocoa equation. Barry Callebaut AG, the world’s largest bulk chocolate maker, reported a 22% decline in cocoa division sales volume for the quarter ended November 30, citing “negative market demand and a prioritization toward higher-return segments.” This wasn’t an isolated incident but rather symptomatic of industry-wide consumption challenges.

Grinding data—a key demand indicator tracked by barchart and industry analysts—confirmed the weakness across regions. The European Cocoa Association reported that Q4 European cocoa grindings fell 8.3% year-over-year to 304,470 metric tons, well below the anticipated 2.9% decline and marking the lowest Q4 performance in 12 years. Asian grindings also deteriorated, declining 4.8% year-over-year to 197,022 metric tons, while North American grindings showed only nominal growth of 0.3% year-over-year to 103,117 metric tons.

The root cause is straightforward: consumers have become resistant to high chocolate prices. As cocoa prices surged over recent years, chocolate prices followed, dampening purchasing interest across consumer demographics worldwide. This demand destruction represents a structural headwind that additional supply only exacerbates.

Regional Production Adjustments Signal Market Recognition

Recognizing the supply-demand imbalance, major cocoa producers have begun adjusting their pricing strategies. Ghana cut official cocoa farmer payments by nearly 30% for the 2025/26 growing season, while the Ivory Coast indicated consideration of a 35% price reduction for mid-crop supplies beginning in April. These significant cuts reflect producer efforts to realign pricing with current market realities and restore buyer interest.

However, production adjustments are lagging pricing corrections. The Ivory Coast projects 2025/26 production will decline 10.8% to 1.65 million metric tons from 1.85 million metric tons in 2024/25, while Nigeria’s cocoa association forecasts a 11% production decline to 305,000 metric tons. Despite these anticipated reductions, current year port shipments from the Ivory Coast have slowed only modestly—1.31 million metric tons through February 22, 2026, represents a 3.7% decline from the comparable prior-year period.

What Market Forecasters Predict

Several major forecasters have weighed in on cocoa’s trajectory. StoneX projects a global cocoa surplus of 287,000 metric tons for 2025/26 and 267,000 metric tons for 2026/27—substantial oversupply conditions. The International Cocoa Organization (ICCO) reported that global cocoa stocks rose 4.2% year-over-year to 1.1 million metric tons as of January.

Rabobank recently revised its 2025/26 surplus estimate downward to 250,000 metric tons from a previous November forecast of 328,000 metric tons, suggesting some moderation in expected oversupply. Yet this adjustment still implies material surplus conditions will persist. The ICCO noted that global cocoa production in 2024/25 rose 7.4% year-over-year to 4.69 million metric tons, marking the first global surplus in four years at an estimated 49,000 metric tons.

The barchart outlook for cocoa reflects these conflicting currents: adequate to abundant supplies meeting subdued demand, with producer pricing adjustments attempting to restore market balance. Resolution will likely require either significant demand improvement—requiring lower chocolate prices to stimulate consumer interest—or production restraint beyond currently projected declines. Until one of these conditions materializes, price pressure appears likely to persist in the near term.