Cocoa price drops by a quarter

The price of cocoa is under pressure due to weaker demand, especially in Europe. At the same time, favorable weather conditions in large producing countries such as Ivory Coast and Ghana are leading to higher supply, causing the market to move further towards a surplus. Now that the holidays are over, the cocoa price has clearly decreased again. Since the market peak, the price on the ICE in New York has dropped by 25.5% from $6,242 per ton to $4,648 per ton. Meanwhile, the price in London has decreased by 25.7% from approximately $6,063.71 to $4,501.68 per ton. Global demand for cocoa has significantly decreased now that the holidays are over, which is reflected in the price. Particularly in Europe, demand has sharply declined. Unlike Americans, Europeans primarily consume chocolate in confectionery. Although there are exceptions, chocolate and cocoa are less quickly incorporated into the basic diet in Europe, making demand more dependent on holidays. Additionally, consumers on this continent tend to choose to live a bit healthier in January to compensate for the excesses of the holidays. In the United States, the effects of this are less visible, as the demand for cocoa there is largely determined by basic nutrition. On average, many more people in that part of the world rely on highly processed products, leading to a constant demand for cocoa. In Asia, the effects are similarly less visible, but this is due to the fact that the main holidays do not fall during the same period. Furthermore, there is a financial-technical reason for the decline. Traders are said to have realized profits after the price increase in December. Global trade media report that exporters and speculators attempted to profit from the earlier price increase. Strong harvests in sight Meanwhile, a more favorable outlook for supply in 2026 is putting further pressure on cocoa prices, especially towards the second half of the year. Particularly in the main producing countries, Ivory Coast and Ghana, signals are increasingly pointing to a recovery on the supply side: favorable weather has resulted in good flowering and pod formation, while field measurements show a notably more positive picture than last season. Mondelez reported that recent counts in West Africa are about 7% above the five-year average and also higher than last year. In Ivory Coast, the main harvest has now begun and farmers are optimistic about both the volumes and the quality, which further reduces concerns about an acute supply shortage. These lower prices are already being felt in the producing countries, but due to the low demand for chocolate, there are still few positive effects on sales. The world's largest producer sees that the income of cocoa farmers is under pressure and has intervened. Ivory Coast has announced that it will buy up unsold cocoa stocks to keep exports flowing and ensure that farmers are paid now that global cocoa prices have sharply declined in recent months. Since October, the drop in demand has led to lower exports, resulting in an estimated 700,000 tons of cocoa remaining unsold, according to the agricultural union Synapci. Many farmers have already been without income for weeks and had to sell their cocoa at a discount or even throw it away as it began to rot. Agriculture Minister Kobenan Kouassi Adjoumani says that the government will purchase the stock at the guaranteed seasonal price, but there remains doubt within the sector about the certainty of this promise. Moreover, it is expected that the new price for the interim season, which will be announced on April 1, will be significantly lower.