Cocoa futures fell sharply through late January, with London May contracts decreasing £927 (23.5%) over two weeks and New York May futures declining $1,169 (21.5%) during the same period. The decline extended to 30% when measured against prices from one month earlier.

The market moved opposite to widely anticipated commodity index buying, with weak speculative longs exiting positions as the expected rally failed to materialize. Grind numbers showed significant weakness, with the world’s largest chocolate producer reporting poor volumes and subsequently replacing its CEO.

Fourth-quarter grind data revealed demand challenges across multiple regions. The European Cocoa Association reported Q4 grind at 304,470 tonnes versus 331,853 tonnes in 2024, an 8.25% decline that exceeded the 3% decrease analysts expected. The result marked the lowest yearly European grind since 2015 at 1,327,107 tonnes.

Malaysia’s Q4 grind fell 6.8% to 79,528 tonnes, while North America’s grind remained nearly unchanged at 103,117 tonnes versus 102,761 tonnes last year. Asia’s grind declined 4.8% to 197,022 tonnes, better than the projected 12% decrease.

Ivory Coast faces operational challenges as cocoa traders struggle with mismatches between domestic and international prices. Falling international prices compressed exporters’ margins, prompting requests for government subsidies or tax reductions. The Coffee and Cocoa Council authorized purchases of approximately 200,000 tonnes of beans as some traders defaulted on forward purchases.

Reports indicate Lebanese exporters may have defaulted on 100,000-200,000 tonnes of cocoa to the CCC, with speculation that smuggled cocoa from other West African producers entered Ivory Coast attracted by historically high farmgate prices. The CCC’s reserve fund, designed to compensate the system when declining futures no longer justify fixed farmgate prices, has never been audited by third parties.

ICE New York exchange stocks increased to 114,000 tonnes from 108,000 tonnes in the previous report, while London exchange stocks remained stable at approximately 36,000 tonnes. The Managed Money net position combined across London and New York increased by 16,100 lots to 38,400 lots short.

Analysts revised supply-demand balances, with some projecting the global cocoa bean balance could shift from a record deficit in 2023/24 to a record surplus in 2025/26. The 2025/26 season now shows projected surpluses between 325,000-400,000 tonnes based on decreased consumption and increased production.


This newsarticle is part of a more comprehensive market analysis on the cocoa market. For the full market analysis, visit: https://app.vespertool.com/market-analysis/2631.