Cocoa Market Faces Perfect Storm: Tariff Relief + Supply Surge

Cocoa prices just got hit from multiple angles. ICE NY December contracts fell -0.62% and London cocoa dropped -1.47% after Trump announced plans to cut 10% reciprocal tariffs on non-US grown commodities—yes, including cocoa. The catch? Brazilian cocoa still faces a hefty 40% national security tariff.

But here’s the real kicker: West Africa is about to flood the market with cocoa.

The Supply Crunch is Reversing

Ivory Coast (world’s #1 producer) shipped 516,787 MT through mid-November—down 5.7% from last year, which seemed bullish. But now? Farmers report stellar conditions. Dry weather is helping beans cure perfectly, and cocoa pods are developing faster than usual in Ghana. Mondelez just noted that West Africa’s cocoa pod count is 7% above the 5-year average.

Demand Is the Other Problem

Chocolate isn’t flying off shelves. Hershey’s Halloween sales were “disappointing”—and Halloween usually drives ~18% of annual US candy sales. Meanwhile, the real alarm bells:

• Asia cocoa grinding fell -17% year-over-year (smallest Q3 in 9 years)
• Europe cocoa grinding down -4.8% y/y (lowest Q3 in a decade)
• North American chocolate sales volume dropped -21% in Q3

Even with lower Nigerian production expected (-11% for 2025/26), the math doesn’t work when buyers aren’t buying.

The Supply Picture Flips

Here’s the plot twist: After the massive 60-year deficit in 2023/24 (-494,000 MT), ICCO projects a 142,000 MT surplus for 2024/25—the first surplus in 4 years. Global production bounced +7.8% to 4.84 MMT.

One Bright Spot

ICE cocoa stocks at US ports hit a 7.75-month low (1,766,644 bags), which normally supports prices. But it’s fighting an uphill battle against weak demand and incoming supply.

The takeaway? Cocoa’s stuck between a rock and a hard place—tariff relief is pulling prices down, West African harvests are ramping up, but chocolate demand globally is cooling fast.