Mid-crop quality concerns persist in West Africa while recent rainfall provides limited relief for tight supply fundamentals

June 4, 2025 – Global cocoa markets continue to experience extreme volatility as supply constraints intensify across key producing regions. The International Cocoa Organization (ICCO) has widened its 2023/24 global deficit estimate to 494,000 metric tons, highlighting the severity of production shortfalls that have kept prices elevated despite recent pullbacks from mid-May highs.

Price volatility reflects supply uncertainty

Cocoa futures have shown dramatic swings in recent weeks, with New York contracts peaking at $10,974 on May 16 and London reaching £7,726 on May 19 before falling sharply around May 20 and again on May 29. Current levels of $9,775 in New York and £6,470 in London reflect the ongoing uncertainty surrounding supply prospects and trade policy developments.

The market’s sensitivity to both weather developments and macroeconomic factors has created a challenging environment for chocolate manufacturers and commodity traders seeking price stability for forward planning.

ICCO revisions reveal deeper supply challenges

The International Cocoa Organization’s latest quarterly update painted a more concerning picture of global supply-demand fundamentals. The organization revised global production down by 120,000 metric tons to 4.368 million metric tons, with Ghana bearing the largest revision of 81,000 tons to 448,969 tons.

Brazil and Ecuador also saw significant downgrades of approximately 18,000 and 11,000 metric tons respectively, indicating that supply challenges extend beyond traditional West African origins.

Simultaneously, global grindings were adjusted down by nearly 67,000 metric tons to 4.818 million metric tons, suggesting either softer demand conditions or processing constraints across major consuming regions.

West African crop conditions remain concerning

Despite improved rainfall patterns in recent weeks, mid-crop quality issues continue to plague key producing regions. Reports of smaller bean sizes and low yields in both Côte d’Ivoire and Ghana are supporting tight supply narratives, even as seasonal moisture conditions have shown improvement.

Côte d’Ivoire’s cocoa arrivals reached 1.626 million metric tons by June 1, representing a 7.3% increase compared to the same period last season. However, weekly arrival rates have slowed significantly, with quality concerns continuing to affect both arrivals and processing volumes.

Ghana has shown stronger purchase volumes with approximately 580,000 metric tons of graded and sealed cocoa by the end of April, a 47% increase year-over-year, though quality concerns persist across the region.

Physical market dynamics tighten

The physical cocoa market is experiencing particular tightness for higher-quality beans, with differentials remaining firm across major origins. Bean availability from key producing regions remains limited, creating pricing pressure that extends through the supply chain to chocolate manufacturers.

In derivative markets, cocoa butter demand has shown some softness in spot positions, though forward offers remain firm as sellers anticipate tighter supply conditions later in the year. Powder markets are displaying stability with buyers cautiously covering near-term requirements.

Trade flows shift global patterns

Netherlands continues to serve as the central hub for global cocoa trade, importing over 348,000 metric tons of beans and semi-finished products while re-exporting more than 311,000 metric tons. Notably, cocoa powder and cake exports were more than three times higher than imports, demonstrating robust downstream processing activity.

The composition of global trade flows is evolving, with cocoa beans declining from 78% to 63% of total imports while processed products gain market share. This shift reflects both supply constraints in origin countries and changing demand patterns in consuming markets.

Market outlook remains weather-dependent

Looking ahead, cocoa markets are expected to maintain elevated price levels with continued volatility as supply fundamentals remain challenged. Mid-crop quality in Côte d’Ivoire and Ghana is anticipated to stay weak through the end of the current season in September 2025.

While some relief could come from stockpiled volumes held by farmers and regulators re-entering the market, there is little evidence of significant releases to date. Longer-term supply relief from Nigeria’s increasing exports and Brazil’s production expansion ambitions are unlikely to impact markets meaningfully before 2026.

Weather conditions, bean arrival patterns, and demand signals will remain critical drivers of price direction in the near term, with the market’s thin trading volumes amplifying sensitivity to any new developments.

This analysis represents key highlights from Vesper’s comprehensive Week 23 cocoa market intelligence report. Access detailed price forecasts, origin-specific analysis, and AI-powered market predictions on the Vesper platform: https://app.vespertool.com/market-analysis/1990