Cocoa Market Shows Mixed Signals: Supply Concerns Easing But Demand Stays Weak

Cocoa futures bounced back from 1.75-year lows today with NY March contracts climbing +0.83%, though London December contracts dipped -2.06%. The recovery was driven by short-covering after data revealed a slowdown in Ivory Coast shipments.

What’s Moving the Market

Supply Side:

• Ivory Coast (world’s #1 producer) shipped just 618,899 MT through Nov 23, down 3.7% YoY
• Yet crop outlook remains solid: cocoa pod counts are 7% above 5-year average
• Ghana reporting favorable weather for pod development
• Nigeria’s output projected to fall 11% to 305,000 MT next year—this could support prices

Demand Headwinds:

• Q3 Asian cocoa grindings crashed 17% YoY to lowest in 9 years
• European grindings down 4.8% YoY to 10-year low
• Hershey warned Halloween chocolate sales were disappointing
• North American chocolate volume plunged 21% in recent quarters

The Plot Twist

EU delayed its Deforestation Regulation (EUDR) by a year, easing supply-chain anxiety. Trump also axed 10% reciprocal tariffs on cocoa. These moves should help prices, but weak chocolate consumption globally is the real headwind.

The Numbers That Matter: ICE US stockpiles hit 8.25-month lows. Global 2024/25 cocoa production jumped 7.8% YoY to 4.84M MT, but demand destruction is the bigger story right now.