Cocoa Market Hits 1.75-Year Low: Supply Surge vs Demand Collapse

Cocoa futures tanked hard today—Dec NYC contracts dropped 5.74%, London fell 5.87%—hitting their lowest level in nearly 2 years. Here’s what’s happening:

The Supply Side Looks Stacked

West African cocoa is coming in hot. Ivory Coast (world’s #1 producer) is crushing it—farmers report bumper crops, perfect weather for drying beans. Ghana’s seeing the same story. Mondelez data shows cocoa pod counts are 7% above the 5-year average and “materially higher” than last year.

But Demand? Crickets.

This is the real problem. Asia’s Q3 cocoa grindings collapsed 17% YoY—worst Q3 in 9 years. Europe? Down 4.8% YoY, lowest Q3 in a decade. North American chocolate sales tanked 21% over 13 weeks ending Sept 7. Even Hershey flagged Halloween chocolate sales as “disappointing”—and that holiday alone makes up 18% of annual US candy revenue.

Trade Policy Wild Card

Trump’s admin dropped 10% reciprocal tariffs on commodities not grown in the US (including cocoa), removing some price support.

Silver Linings (Maybe)

Icory Coast cocoa exports are slowing (down 5.7% YoY through mid-November). ICE inventories hit 8-month lows. Nigeria—world’s 5th largest—projects production to fall 11% next year.

But here’s the kicker: ICCO forecasts a 142,000 MT global surplus for 2024/25 (first surplus in 4 years), up from a massive -494,000 MT deficit last year. Supply’s swinging hard from crisis to glut.

The Takeaway: Cocoa’s caught between a structural demand crisis and incoming supply relief. Unless consumption picks up, this downtrend could hold.