Cocoa Prices Plunge as Weak Demand and Surplus Supplies Pressurize Markets

ICE NY cocoa (CCH26) fell -6.184% to 276 on January 23, while ICE London cocoa #7 (CAH26) dropped -6.57%. Cocoa prices extended a two-week decline, hitting 2-year lows in both markets amid weak consumer demand for chocolate. Barry Callebaut AG reported a -22% sales volume drop in its cocoa division, citing market challenges. Global cocoa stocks rose +4.2% y/y to 1.1 MMT, according to the ICCO, adding pressure. European and Asian cocoa grindings also declined significantly, with Europe seeing an 8.3% y/y drop in Q4. Meanwhile, favorable growing conditions in West Africa boosted February-March harvests, further increasing supplies. Despite recent support from smaller cocoa shipments from Ivory Coast and Nigeria, prices remain under pressure due to a projected global surplus of 49,000 MT for 2024/25. The EU's deforestation law delay also kept cocoa supplies ample, undercutting prices.