Global Cocoa Market Faces Mounting Supply Pressures and Demand Weakness, According to Barchart Analysis

The global cocoa market continues to struggle under the weight of abundant supplies and faltering demand, with trading activity pointing to extended weakness ahead. According to Barchart commodity data, major cocoa futures on London and New York exchanges have posted consecutive losses as buyers worldwide remain reluctant to commit to purchases at current asking prices.

ICE London and New York Cocoa Futures Slide on Inventory Build

On Monday, ICE New York cocoa futures (CCK26) ended the session down 2.36%, while ICE London cocoa futures (CAH26) declined 3.45%, though both contracts remain elevated compared to lows hit earlier in the week. The retreat in prices reflects growing inventory pressures, with ICE cocoa stockpiles climbing to a 5.25-month high of 2,111,554 bags last Friday. International cocoa purchasers are proving unwilling to accept the official farm-gate prices currently quoted in Ivory Coast and Ghana, citing significant premiums over world market rates. This buyer hesitation is exacerbating the inventory buildup, as fewer transactions move beans from origin to international markets.

The pricing disconnect has prompted major cocoa-producing nations to recalibrate their support levels. Ghana recently slashed the official price paid to cocoa farmers by nearly 30% for the 2025/26 growing season, while Ivory Coast indicated it is weighing a 35% price reduction applicable to the mid-crop harvest commencing in April. These two nations collectively supply more than half of the world’s cocoa, making their pricing adjustments critical market signals.

Demand Weakness Extends Across All Major Consuming Regions

The seven-week downtrend in cocoa pricing reflects systemic demand challenges across global chocolate and cocoa product manufacturers. Barry Callebaut AG, the world’s largest bulk chocolate supplier, reported a 22% drop in cocoa division sales volume for the quarter ending November 30, attributing the decline to tepid market demand and a strategic shift toward higher-margin product segments. This pullback by a major industry player signals broader consumer price sensitivity affecting the entire cocoa value chain.

Grinding activity data from major consuming regions corroborates the weakness. The European Cocoa Association reported that Q4 European cocoa grindings fell 8.3% year-over-year to 304,470 MT—a steeper decline than expected and the weakest fourth quarter in 12 years. Asian grinding fell 4.8% to 197,022 MT in the same quarter, while North American cocoa grindings rose only 0.3% to 103,117 MT, indicating near-flat activity in this key market. Chocolate maker Mondelez has noted that elevated cocoa prices continue to discourage consumer demand, with retail pricing remaining prohibitively high.

Supply Surge from West Africa and Beyond Deepens the Imbalance

Favorable agricultural conditions in West Africa are compounding the oversupply situation. Tropical General Investments Group noted that optimal growing conditions are expected to boost the February-March cocoa harvest in Ivory Coast and Ghana, with farmers reporting larger and healthier pods compared to the prior year. Mondelez data indicates that the current pod count in West Africa sits 7% above the five-year average and “materially higher” than last year’s production levels. With the main crop harvest underway in Ivory Coast and farmers expressing optimism about yield quality, the region appears positioned to deliver substantial output.

Nigeria, the world’s fifth-largest cocoa producer, has also increased export flows. Nigerian cocoa exports rose 17% year-over-year in December to 54,799 MT, adding further to global supply pressures and limiting any meaningful price support.

Market Surplus Projections Point to Extended Oversupply Conditions

Industry forecasters have quantified the supply imbalance with precision. StoneX predicted a global cocoa surplus of 287,000 MT in the 2025/26 season, with another 267,000 MT surplus projected for 2026/27. The International Cocoa Organization (ICCO) reported that global cocoa stocks rose 4.2% year-over-year to 1.1 million MT as of January 23. More recently, Rabobank revised its 2025/26 global surplus estimate downward to 250,000 MT from an earlier forecast of 328,000 MT, though this still represents a material oversupply relative to consumption. ICCO’s December 2024 estimate put the 2024/25 global surplus at 49,000 MT, the first surplus recorded in four years, with global production reaching 4.69 MMT, up 7.4% year-over-year.

Bullish Factors Remain Limited Amid Structural Market Headwinds

A few supportive factors merit consideration for longer-term traders. Ivory Coast has projected a 10.8% year-over-year production decline to 1.65 MMT for the 2025/26 season compared to 1.85 MMT in 2024/25. Cumulative cocoa shipments to Ivorian ports through February 22, 2026, totaled 1.31 MMT—down 3.7% from 1.36 MMT during the equivalent prior-year period—suggesting a slowing delivery pace. Nigeria’s Cocoa Association anticipates an 11% year-over-year production decline to 305,000 MT for 2025/26, down from 344,000 MT in 2024/25. These production headwinds may eventually tighten balances, but near-term supply conditions appear likely to remain burdensome for prices seeking recovery.

The confluence of robust global inventory levels, slack demand across major consuming markets, and abundant near-term harvests suggests the cocoa market will remain under pressure in the coming weeks. Traders monitoring this market through Barchart commodity intelligence and London coffee market data should remain attuned to any signs of demand stabilization or further policy adjustments from major producing nations.