Cocoa Prices Face Sustained Pressure Amid Global Inventory Buildup

The cocoa market continues to deteriorate, with both New York and London futures reaching multi-year lows as the complex interplay of rising supplies and declining demand reshapes the commodity landscape. March ICE NY cocoa is down significantly at -232 points (-7.19%), while March ICE London cocoa #7 declined by -124 points (-5.47%), extending losses that have accumulated over recent weeks. This sustained weakness reflects a fundamental shift in market dynamics where traditional buyers have become increasingly selective about pricing, and warehouse inventories continue their upward climb.

The underlying driver of current cocoa price weakness stems from a profound disconnect between abundant global supplies and deteriorating consumption patterns. International cocoa buyers have adopted a cautious stance, refusing to commit to official asking prices for beans from major producing regions including the Ivory Coast and Ghana. This buyer reticence has created a feedback loop that directly boosts inventory levels—ICE cocoa stockpiles recently reached a five-month peak of 2,036,385 bags, signaling that the market is struggling to absorb available supply.

Market Weakness Intensifies: Buyer Caution and Rising Stockpiles

Regional price dynamics reveal important nuances in how the cocoa selloff is unfolding across major trading hubs. London cocoa losses remain relatively contained due to concurrent weakness in sterling, the currency in which these contracts are quoted. Conversely, New York cocoa reflects the full brunt of selling pressure in dollar terms. The price pressure has become acute enough that both major producing countries have moved to adjust farmer payouts—Ghana recently cut official cocoa prices offered to farmers by nearly 30% for the upcoming 2025/26 season, a move that signals desperation to maintain economic viability. The Ivory Coast is reportedly considering comparable reductions. These adjustments underscore the strain filtering down through the entire value chain, from global exchanges to farmers in West Africa who produce more than half of the world’s cocoa supply.

Global Supply Surplus Weighs on Market Sentiment

Quantitative forecasting reinforces the severity of the supply-demand imbalance currently confronting the market. StoneX projects a global cocoa surplus of 287,000 metric tons for the 2025/26 season, with an additional 267,000 metric ton surplus projected for 2026/27. These surpluses persist despite earlier projections showing the 2024/25 season would deliver the first surplus in four years at 49,000 metric tons. The International Cocoa Organization reported that global cocoa stocks have swelled by 4.2% year-over-year to 1.1 million metric tons, a volume that underscores the persistent oversupply condition. This structural excess supply dynamic directly pressures prices downward and validates the reluctance of buyers to pay elevated prices.

Production dynamics in key regions further emphasize the supply-heavy environment. Favorable growing conditions across West Africa are expected to lift the February-March harvest in the Ivory Coast and Ghana, with farmers reporting larger and healthier cocoa pods compared to the same period in the prior year. Mondelez, a major chocolate manufacturer, noted that the latest cocoa pod count in West Africa is running 7% above the five-year average and meaningfully higher than the previous year’s crop. Harvest activity in the Ivory Coast’s main crop zone has commenced with farmer optimism regarding crop quality. Nigeria, the world’s fifth-largest cocoa producer, has also contributed to supply pressures through elevated export volumes—recent export data showed Nigerian cocoa shipments rose 17% year-over-year to 54,799 metric tons. This regional export momentum adds to the overall global glut.

Weak Demand Signals from Major Chocolate Producers

The demand side of the equation presents an equally concerning picture for cocoa bulls. Consumers have proven unwilling to accept high chocolate prices, creating a destructive headwind for cocoa consumption. Barry Callebaut AG, the world’s largest bulk chocolate manufacturer, disclosed a 22% decline in sales volume within its cocoa division for the quarter ending November 30, citing explicit “negative market demand and a prioritization of volume toward higher-return segments within cocoa.” This disclosure from a global industry bellwether carries outsized significance for understanding consumption trends.

Grinding data—the metric that measures actual cocoa processing activity—reinforces this demand weakness across all major regions. The European Cocoa Association reported that Q4 European cocoa grindings fell 8.3% year-over-year to 304,470 metric tons, substantially worse than market expectations of a 2.9% decline and marking the lowest quarterly grind for Q4 in 12 years. Asian cocoa grindings similarly contracted, with the Cocoa Association of Asia reporting Q4 Asian grindings declined 4.8% year-over-year to 197,022 metric tons. Even North America showed stagnation rather than growth—the National Confectioners Association reported Q4 North American cocoa grindings rose only 0.3% year-over-year to 103,117 metric tons. This synchronized contraction across the world’s three largest consuming regions paints a sobering picture of demand destruction.

Production Outlook and Regional Export Dynamics

Looking forward, the supply trajectory presents mixed signals depending on which producing region takes center stage. Nigeria’s Cocoa Association projects that Nigerian cocoa production in the 2025/26 season will contract by 11% year-over-year to 305,000 metric tons, down from the projected 344,000 metric tons for the 2024/25 crop year. This reduction could eventually provide some price support, though its timing and magnitude remain uncertain.

Meanwhile, cumulative shipment data from the Ivory Coast, where harvest operations have begun, shows that farmers shipped 1.30 million metric tons of cocoa to ports during the current marketing year running from October 1, 2025, through February 15, 2026—a 3% decline compared to 1.34 million metric tons in the same period a year prior. This moderation in port deliveries represents one of the few supportive factors for cocoa prices, though it occurs within the context of broader global oversupply.

Rabobank recently revised its 2025/26 global cocoa surplus estimate to 250,000 metric tons, down from a prior November forecast of 328,000 metric tons, suggesting some acknowledgment of supply-demand rebalancing. However, this revised figure still indicates meaningful excess supply conditions will persist, leaving cocoa prices vulnerable to continued pressure unless demand indicators show unexpected improvement.