Cocoa Prices Slide on Surplus Outlook and Weak Demand (-42%, -30% on CCH26 and CAH26)

Cocoa prices declined sharply on February 13, 2026: March CCH26 down -42 (-1.16%) and March CAH26 down -30 (-1.15%). The sell-off extends a six-week decline, with NY cocoa hitting a 2.25-year low and London cocoa a 2.5-year low. Key factors: abundant supplies and tepid demand. StoneX forecasts a 2025/26 surplus of 287,000 MT and 267,000 MT for 2026/27; ICCO reported stocks at 1.1 MMT, up 4.2% y/y. ICE cocoa inventories reached 1,899,988 bags, a 4-month high. Demand weakness is evident: Barry Callebaut cocoa sales volumes fell -22% QoQ in November 2025; European cocoa grindings -8.3% y/y Q4, Asian -4.8% y/y, and North American +0.3% y/y. Nigerian cocoa exports rose +17% y/y to 54,799 MT in December. Support for prices comes from tighter supply outlooks: ICCO cut 2024/25 surplus to 49,000 MT and production to 4.69 MMT; Rabobank trimmed 2025/26 surplus to 250,000 MT from 328,000 MT. Nigeria is expected to produce 305,000 MT in 2025/26, down -11% y/y. Challenges persist: Ivory Coast shipped 1.27 MMT to ports in the current marketing year, down -3.8% from 1.32 MMT a year earlier. Favorable West Africa growing conditions are expected to lift the February-March harvest in Ivory Coast and Ghana, with pod counts 7% above the five-year average.