• (Ecofin Agency) - Cocoa futures hit two-year lows amid rising supply, weaker demand
• Market shifts into surplus after three consecutive deficit seasons
• High prices curb consumption despite increased output in West Africa

Cocoa futures slid to two-year lows on Tuesday, Jan. 20. In London, prices sank to 3,315 pounds ($4,474) per tonne. On ICE in New York, they fell to as low as $4,612.

The weakness early this year extends a downtrend that took hold in 2025, after prices surged in 2024.

Overall, New York cocoa futures fell 48% last year after jumping 178% in 2024. In London, the benchmark contract lost 50% in 2025 after gaining 158% in 2024. The decline has been driven by expectations of higher output and softer demand as elevated prices curb consumption. After three straight seasons of deficits from 2021/2022 to 2023/2024, the market is now swinging back into surplus.

The International Cocoa Organization (ICCO) forecasts a surplus of 49,000 tonnes in 2024/2025. Supply is expected to rise in the three biggest producing countries. In Côte d’Ivoire, output is projected at 1.85 million tonnes, up from 1.67 million a year earlier. Ghana’s crop is seen at 600,000 tonnes versus 530,000, while Ecuador’s is forecast at 480,000 tonnes compared with 430,000.

For the 2025/2026 season, the market is expected to post a surplus of 250,000 tonnes, according to recent Rabobank data.

Outlook for 2026

Cocoa grindings fell sharply in the fourth quarter of 2025, a sign of weakening demand. In Asia, processing declined 4.82% to 197,022 tonnes. In Europe, it dropped 8.3% to 304,470 tonnes, the lowest level in 21 years. Grindings in the United States edged up 0.35% to 103,117 tonnes, but analysts say consumer demand remains subdued, limiting the chances of a sustained rebound.

Barry Callebaut, the world’s largest chocolate maker, reported first-quarter 2025/2026 revenue rose 6.4% to 3.67 billion Swiss francs (about $4.64 billion). The company’s fiscal first quarter runs from September to November 2025. However, sales volumes fell 9.9%, reflecting weaker consumer purchases as higher retail prices dampen demand.

Analysts say the coming months will be crucial in determining the market’s direction, particularly output and stock levels in West Africa and especially in Côte d’Ivoire. In Côte d’Ivoire, WAEMU’s largest economy, authorities said this week they would buy 123,000 tonnes of unsold cocoa in producing regions after a sharp slowdown in bean sales.

Espoir Olodo