May 21, 2025 – Vesper Market Analysis

The cocoa market finds itself at a critical juncture this week as the recent price rally shows signs of slowing despite persistent supply concerns in West Africa. U.S. cocoa futures reached a three-month high of $10,974 on May 19 before settling lower at $10,874 on May 20, while European futures peaked at £7,726 before easing to £7,640.

Mixed signals cloud market outlook

Several competing factors are currently influencing market dynamics:

  • Improving weather conditions: Recent rainfall across key growing regions in West Africa has provided much-needed relief after a dry start to May, potentially supporting mid-crop development.
  • Quality concerns persist: Despite higher arrival volumes in Ivory Coast (up 10.1% year-over-year), poor bean quality continues to plague deliveries, limiting usable supply for processors.
  • Inventory build: ICE-monitored U.S. cocoa stocks have climbed to a 7-month high of 2.16 million bags, easing immediate supply fears.
  • Demand destruction: High prices are beginning to impact consumer behavior, with global demand potentially falling by 5% according to ICCO estimates.

West African production update

In Ivory Coast, Africa’s largest producer, arrivals reached 1.582 million metric tons by May 18, showing improvement over last season. However, quality issues and shipping container shortages continue to complicate the supply picture.

Ghana, meanwhile, has announced ambitious plans to secure 200,000 hectares for cocoa cultivation by year-end, aiming to reverse production declines that have pushed output to a 20-year low of 500,000MT.

What’s next for Cocoa prices?

With so many variables in play, from weather patterns to regulatory decisions and changing consumer behavior, market participants remain cautious. Unless West African growing conditions deteriorate significantly, prices are likely to stabilize with demand destruction acting as a flexible ceiling for major gains.

For a deeper dive into cocoa market fundamentals, including detailed price charts, regional analyses, and our exclusive price forecast, continue reading our full weekly market report here: https://app.vespertool.com/market-analysis/1952