March ICE NY cocoa (CCH26) on Friday closed up +112 (+3.77%), and March ICE London cocoa #7 (CAH26) closed up +133 (+6.25%).
Cocoa costs rallied sharply on Friday as greenback weak point ($DXY) spurred technical quick masking in cocoa futures, which had reached deeply oversold ranges following this week’s plunge.
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On Thursday, cocoa costs prolonged their six-week-long selloff, sinking to 2.75-year nearest-futures lows. Worldwide cocoa consumers are reluctant to pay official farm-gate costs for beans within the Ivory Coast and Ghana, as these costs are a lot greater than present world costs. The dearth of consumers is boosting provides as ICE cocoa inventories rose to a 5.25-month excessive of two,087,755 luggage on Thursday.
Final week, Ghana reduce the official worth it pays its cocoa farmers by practically 30% for provides for the 2025/26 rising season, and on Friday, the Ivory Coast stated it was contemplating a 35% reduce in costs that may kick in for the mid-crop harvest that begins in April. The Ivory Coast and Ghana produce greater than half of the world’s cocoa.
Cocoa costs are within the midst of a six-week-long downtrend amid sturdy international provides and slack demand. On January 29, StoneX forecasted a world cocoa surplus of 287,000 MT within the 2025/26 season and a 267,000 MT surplus for 2026/27. Additionally, the Worldwide Cocoa Group (ICCO) reported on January 23 that international cocoa shares rose +4.2% y/y to 1.1 MMT.
Demand issues have hammered cocoa costs as customers proceed to balk on the excessive worth of chocolate. On January 28, Barry Callebaut AG, the world’s largest bulk chocolate maker, reported a -22% decline in gross sales quantity in its cocoa division for the quarter ending November 30, citing “adverse market demand and a prioritization of quantity towards higher-return segments inside cocoa.”
Grinding experiences additionally confirmed weak demand. On January 15, the European Cocoa Affiliation reported that This fall European cocoa grindings fell -8.3% y/y to 304,470 MT, a much bigger decline than expectations of -2.9% y/y and the bottom for a This fall in 12 years. On December 16, the Cocoa Affiliation of Asia reported that This fall Asian cocoa grindings fell -4.8% y/y to 197,022 MT. Additionally, the Nationwide Confectioners Affiliation reported This fall North American cocoa grindings rose solely +0.3% y/y to 103,117 MT.
Favorable rising circumstances in West Africa are additionally a adverse issue for cocoa costs. Tropical Basic Investments Group just lately stated that favorable rising circumstances in West Africa are anticipated to spice up the February-March cocoa harvest within the Ivory Coast and Ghana, as farmers report bigger and more healthy pods in contrast with the identical interval final yr.
Chocolate maker Mondelez just lately stated that the newest cocoa pod depend in West Africa is 7% above the five-year common and “materially greater” than final yr’s crop. Harvest of the Ivory Coast’s most important crop has begun, and farmers are optimistic about its high quality.
Additionally undercutting cocoa costs are greater exports from Nigeria, the world’s fifth-largest cocoa producer. Final Tuesday, Bloomberg reported that Nigerian Dec cocoa exports rose +17% y/y to 54,799 MT.
Slowing cocoa deliveries to ports within the Ivory Coast is a supportive issue for costs. Monday’s cumulative information confirmed that Ivory Coast farmers shipped 1.30 MMT of cocoa to ports within the present advertising yr (October 1, 2025, via February 15, 2026), down -3.0% from 1.34 MMT in the identical interval a yr in the past.
On the constructive facet, Nigeria’s Cocoa Affiliation tasks that Nigerian cocoa manufacturing in 2025/26 will fall by -11% y/y to 305,000 MT, from a projected 344,000 MT for the 2024/25 crop yr.
The Worldwide Cocoa Group (ICCO) on December 19 estimated a 2024/25 international cocoa surplus of 49,000 MT, marking the primary surplus in 4 years. ICCO additionally stated international cocoa manufacturing in 2024/25 rose by +7.4% y/y to 4.69 MMT. Rabobank on February 10 reduce its 2025/26 international cocoa surplus estimate to 250,000 MT from a November forecast of 328,000 MT.
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