Cocoa Market News: Oversupply and Weakening Demand Drag on Prices

Recent cocoa market news reflects intensifying pressure on prices as a perfect storm of ample global supplies collides with sluggish buyer demand. On Monday, May futures on ICE NY (CCK26) tumbled 75 points, or 2.36%, while March London cocoa (CAH26) fell 78 points, representing a 3.45% decline. Despite the retreat, prices remain above the lows seen throughout the previous week—marking the second consecutive week of losses in what has become a seven-week downtrend. The fundamental shift underlying this cocoa market news is straightforward: global supplies are abundant, but the world’s chocolate makers and consumers are remarkably reluctant to buy.

Inventory Surge and Farm-Gate Price Collapse

The disconnect between supply and demand has become impossible to ignore. International cocoa purchasers are turning away from official cocoa bean prices in the Ivory Coast and Ghana because those asking prices tower well above what world markets currently bear. This buyer hesitance is now manifesting in rising inventory levels at ICE warehouses, which climbed to a fresh 5.25-month peak of 2,111,554 bags last Friday. The situation prompted dramatic action from West Africa’s two cocoa powerhouses: Ghana slashed its official farmer payment by nearly 30% for the upcoming 2025/26 growing season, while the Ivory Coast signaled it would consider a comparable 35% reduction ahead of the April mid-crop harvest. Together, these nations produce over half of the planet’s cocoa supply, making their pricing decisions critical indicators for the entire sector.

Supply Glut Defined by Professional Forecasts

Industry analysts have quantified what cocoa market observers are witnessing. StoneX projected on January 29 that a global surplus of 287,000 metric tons would emerge during 2025/26, with an even larger 267,000 metric ton surplus anticipated for 2026/27. The International Cocoa Organization (ICCO) reinforced these concerns on January 23, reporting that worldwide cocoa stocks expanded 4.2% year-over-year to reach 1.1 million metric tons—a substantial cushion of available supply. Adding to the oversupply narrative, ICCO estimated in December that 2024/25 would produce a 49,000 metric ton surplus, the first surplus experienced in four years. The organization also documented that global cocoa production rose 7.4% year-over-year to 4.69 million metric tons during 2024/25.

More recent forecasts have only marginally reduced these projections. Rabobank trimmed its 2025/26 outlook to 250,000 metric tons of surplus on February 10, down from its November estimate of 328,000 metric tons—still an enormous quantity flooding the market. When inventory levels are this elevated and surpluses this predictable, prices naturally face relentless headwinds.

Demand Destruction Across All Major Regions

Cocoa market news consistently highlights one troubling reality: global chocolate consumption and cocoa processing have stalled. The world’s largest bulk chocolate maker, Barry Callebaut AG, delivered a stark warning when it reported on January 28 that cocoa division sales volume plummeted 22% during the quarter ending November 30. Management explicitly blamed “negative market demand and a prioritization of volume toward higher-return segments,” signaling that chocolate itself has become too costly for consumers to purchase at current price points.

Regional grinding data—a critical metric for measuring actual cocoa processing demand—painted an equally bleak picture. The European Cocoa Association reported on January 15 that Q4 grindings across Europe contracted 8.3% year-over-year to 304,470 metric tons. This decline exceeded forecasts of just 2.9% and marked the weakest Q4 performance in a dozen years. Asia’s performance was only marginally better: the Cocoa Association of Asia documented a Q4 decline of 4.8% year-over-year to 197,022 metric tons on December 16. North America offered the only glimmer of resilience, though even that region barely managed a 0.3% year-over-year increase, climbing only to 103,117 metric tons during Q4. This synchronized contraction across the world’s three largest cocoa-consuming regions underscores that demand destruction, not temporary softness, is reshaping the market.

Favorable Growing Conditions Amplify Oversupply Concerns

Just when the cocoa market might have benefited from production challenges, West Africa is experiencing ideal growing conditions. Tropical General Investments Group recently highlighted that favorable weather patterns in West Africa are setting the stage for a robust February-March harvest across the Ivory Coast and Ghana. Farmers are reporting larger and healthier cocoa pods compared to the identical period last year—a meaningful advantage that translates to higher yields. Chocolate maker Mondelez added weight to this observation on January 28, noting that current pod counts in West Africa are running 7% above the five-year average and materially elevated compared to last year’s crop. The Ivory Coast’s main harvest has commenced with farmers expressing optimism about crop quality.

Nigeria, the world’s fifth-largest cocoa producer, is compounding the supply pressure through elevated export volumes. Bloomberg reported on February 4 that Nigerian cocoa exports for December surged 17% year-over-year to 54,799 metric tons, demonstrating that even third-tier producing nations are accelerating shipments—likely rushing to capitalize on prices before they fall further.

Counterbalance: Production Declines Ahead

The one element providing some structural support to cocoa market conditions emerges from forward production expectations. The Ivory Coast has projected that cocoa production during 2025/26 will decline 10.8% year-over-year to 1.65 million metric tons from 1.85 million metric tons in 2024/25—a meaningful contraction. Similarly, Nigeria’s Cocoa Association forecasts an 11% year-over-year production decline to 305,000 metric tons for 2025/26, down from an estimated 344,000 metric tons in 2024/25. These projected deficits would theoretically begin offsetting current surpluses. However, observers must first navigate through the immediate supply overhang before any supply-demand rebalancing can meaningfully support prices.

Slowing deliveries into Ivory Coast ports hint that supply may already be moderating slightly. Farmers have shipped 1.31 million metric tons to ports during the current marketing year (October 1, 2025 through February 22, 2026), representing a 3.7% decline compared to 1.36 million metric tons during the equivalent prior-year period. Whether this pace change signals a sustainable reduction or merely reflects logistics adjustments remains unclear.

Outlook for Cocoa Market News

The cocoa market sits at an inflection point. Present conditions overwhelmingly favor buyers as supplies bulge while demand contracts across major consumption centers. Cocoa market participants face months of inventory digestion ahead before production declines can meaningfully tighten global balances. Until consumption patterns strengthen or supply growth decelerates significantly, prices are likely to remain under pressure despite their current levels holding above the recent 2.75-year lows.