Cocoa Prices Fall Below $4,000 for the First Time Since 2023, Driven Largely by Decreasing Demand
Source: Coffee Finance Network (www.coffinance.com)
New York cocoa futures have dipped below $4,000 per ton this week for the first time since 2023, a decline linked to weakening demand, according to market participants surveyed by Bloomberg.
In December 2024, poor harvests in West Africa sent cocoa bean futures to an all-time high. The price shock led consumers to cut back on chocolate consumption, while confectionery makers reformulated their products, turning to cheaper alternatives and adding more other ingredients such as nuts. Prices have now dropped by around 70% from their peak.
Market Forecasts
StoneX has raised its forecast for a global cocoa supply surplus in the 2025/26 season and expects the surplus to continue into 2026/27.
In Europe, the world's largest cocoa consumer market, cocoa grinding volumes in the fourth quarter plummeted to their lowest level since 2013. Meanwhile, cocoa-supplying countries have ramped up production.
Marex Group, an investment bank, also noted a significant oversupply in physical cocoa inventories.
Economic downturns have taken a toll on cocoa-producing nations. In Côte d’Ivoire and Ghana, the major supplying countries, governments set local cocoa prices. Sharp currency depreciations have caused a disconnect between domestic and international prices, negatively impacting the financial health of exporters. Authorities in Côte d’Ivoire have announced plans to negotiate cocoa bean purchases to raise funds for stockpiling, as cocoa beans are piling up in warehouses across the country.