Global cocoa prices have plunged to their lowest levels in over two weeks, as improving supply conditions in West Africa and weakening global demand combine to exert fresh pressure on the market.
Prices fell sharply on Wednesday, with cocoa dropping to $3,135 per tonne, driven by a stronger US dollar and expectations of a bumper harvest in key producing countries, particularly Ghana and Ivory Coast.
Farmers in both countries report that consistent rainfall has significantly boosted pod development, raising expectations of increased output. The two nations together account for more than half of global cocoa production, making their supply outlook critical to global price trends.
Adding to the downward pressure, cocoa inventories monitored by the Intercontinental Exchange (ICE) climbed to a 7.75-month high of over 2.3 million bags, signalling ample supply in the market.
Demand Weakens as High Prices Bite
Beyond supply factors, softening global demand for chocolate is compounding the decline in prices.
Major industry player Barry Callebaut AG, the world’s largest bulk chocolate producer, recently reported a 22% drop in sales volumes in its cocoa division, citing weak consumer demand and shifting priorities toward higher-margin products. Grinding data across key regions also points to declining consumption:
Cocoa processing took a hit across regions, with Europe seeing an 8.3% year-on-year drop, Asia experiencing a 4.8% decline, and North America managing only a slight 0.3% growth.
The figures reflect growing consumer resistance to high chocolate prices, which had surged in recent months.
Farmers Face Price Cuts Despite Output Gains
In a move that underscores the pressure on the sector, both Ghana and Ivory Coast have cut the prices paid to cocoa farmers, with reductions of up to 30% in Ghana and 57% in Ivory Coast for the ongoing season.
The cuts come even as production prospects improve, raising concerns about farmer incomes and long-term sustainability in the sector.
Mixed Signals in Global Outlook
While supply remains strong in the short term, the broader outlook is mixed. Slower cocoa deliveries from Ivory Coast ports and concerns over logistics disruptions have provided some support to prices in recent weeks.
However, global forecasts continue to point to market surpluses, with the International Cocoa Organization (ICCO) projecting a 75,000 metric tonne surplus for the 2024/25 season, marking the first surplus in four years.
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Further ahead, analysts expect even larger surpluses, suggesting that downward pressure on prices could persist.
Market Outlook
With supply rising, demand weakening, and inventories building, the cocoa market is entering a correction phase after months of high prices.
Unless demand recovers or production faces fresh disruptions, analysts warn that cocoa prices may remain under pressure—posing fresh challenges for producers, especially in West Africa.
