December ICE NY cocoa (CCZ25) today is down -33 (-0.62%), and December ICE London cocoa #7 (CAZ25) is down -60 (-1.47%).
Cocoa prices are seeing weakness after the Trump administration announced last Friday that it would drop 10% reciprocal tariffs on commodities not grown in the US, including cocoa. However, US imports of cocoa from Brazil will still apparently be subject to the 40% US national-security tariff on Brazil. In 2023, Brazil was the fifth-largest cocoa producer in the world.
Signs of a slowdown in cocoa exports from the Ivory Coast, the world's largest cocoa producer, are a positive factor for prices. Monday's government data showed that Ivory Coast farmers shipped 516,787 MT of cocoa to ports this new marketing year, from October 1 through November 16, down -5.7% from 548,494 MT in the same period a year ago.
Since posting 6-week highs in early November, cocoa prices have retreated amid expectations of a bumper cocoa crop in West Africa. Reports from Ivory Coast cocoa farmers stated that cocoa trees are doing well, and recent dry weather helped harvested beans dry, while cocoa farmers in Ghana said favorable weather is allowing cocoa pods to develop quickly.
Chocolate maker Mondelez recently said that the latest cocoa pod count in West Africa is 7% above the five-year average and "materially higher" than last year's crop. The harvest of the Ivory Coast's main crop has just begun, and farmers are optimistic about its quality.
Weak global cocoa demand is also bearish for prices. On October 30, the CEO of chocolate-maker Hershey said chocolate sales this Halloween season were "disappointing." Halloween made up nearly 18% of annual US candy sales in 2024, second only to Christmas. Meanwhile, the Cocoa Association of Asia on October 17 reported that Q3 Asia cocoa grindings fell by -17% y/y to 183,413, the smallest grindings for a Q3 in 9 years. The European Cocoa Association on October 16 reported that Q3 European cocoa grindings fell -4.8% y/y to 337,353 MT, the lowest for a third quarter in 10 years. The National Confectioners Association reported that Q3 North American cocoa grindings rose +3.2% y/y to 112,784 MT, but the addition of new reporting companies skewed the data. In related news, North American sales volume of chocolate candy was down more than -21% in the 13 weeks ending September 7, compared to the same period last year, according to data from research firm Circana.
Shrinking ICE cocoa inventories are supportive for cocoa prices. ICE-monitored cocoa inventories held in US ports fell to a 7.75-month low of 1,766,644 bags on Friday.
A supportive factor for cocoa is lower cocoa production in Nigeria, the world's fifth-largest cocoa producer. Nigeria's Cocoa Association projects that Nigeria's 2025/26 cocoa production will fall by -11% y/y to 305,000 MT from a projected 344,000 MT for the 2024/25 crop year. In related news, Nigeria reported that its September cocoa exports were unchanged y/y at 14,511 MT.
On May 30, the International Cocoa Organization (ICCO) revised its 2023/24 global cocoa deficit to -494,000 MT, the largest deficit in over 60 years. ICCO said 2023/24 cocoa production fell by -13.1% y/y to 4.380 MMT. ICCO stated that the 2023/24 global cocoa stocks-to-grindings ratio declined to a 46-year low of 27.0%. For 2024/25, ICCO estimated a global cocoa surplus of 142,000 MT, marking the first surplus in four years. ICCO also said global cocoa production in 2024/25 rose by +7.8% y/y to 4.84 MMT.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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