Cocoa Futures Prices Hit Multi-Year Lows as Global Supply Overshoots Demand

The commodity markets are witnessing significant upheaval in cocoa trading. March contracts for ICE NY cocoa (CCH26) plunged 3.69% with a loss of 139 points, while ICE London cocoa #7 (CAH26) suffered a steeper 4.71% decline, dropping 129 points. This marks the seventh consecutive week of losses for cocoa futures prices, with both major trading hubs posting their weakest levels in years—New York cocoa hasn’t traded this low since 2024, while London prices have sunk to a 2.5-year bottom. The underlying cause stems from a fundamental market imbalance: producers are flooding the market with beans while global consumers are pulling back on purchases.

Market Turmoil: How Cocoa Futures Prices Collapsed in March

The latest trading data reveals a market under intense pressure. Cocoa futures prices have been unable to find support despite multiple headwinds pointing toward stabilization. The 139-point drop in New York contracts and 129-point decline in London futures represent more than simple profit-taking—they signal a structural shift in how traders are pricing the commodity. Industry observers note that each new supply report seems to trigger fresh selling, creating a downward spiral that keeps cocoa futures prices in freefall.

The Supply Surge Overwhelming Cocoa Prices

The global cocoa market is drowning in beans. StoneX analysts projected on January 29 that the 2025/26 season will produce a surplus of 287,000 metric tons—a figure that explodes even further to 267,000 metric tons in 2026/27. These numbers underscore the magnitude of overproduction hitting the market. Meanwhile, the International Cocoa Organization (ICCO) released inventory data on January 23 showing that worldwide cocoa stockpiles have ballooned 4.2% year-over-year, reaching 1.1 million metric tons in storage globally.

The warehouse situation is equally grim. ICE-monitored cocoa inventories have climbed to a 3.75-month peak of 1,871,034 bags as of recent trading. This accumulation of stocks represents a crushing weight on cocoa futures prices. With storage facilities filling up faster than demand can absorb supply, traders are forced to accept lower prices just to move inventory. The psychological impact of rising stockpiles cannot be overstated—each inventory report reinforces the bearish sentiment that has gripped the market.

Chocolate Demand Crumbles, Dragging Down the Market

Consumption weakness is compounding supply troubles. Barry Callebaut AG, the world’s leading bulk chocolate supplier, announced on January 28 that its cocoa division experienced a stunning 22% plunge in sales volume for the November 30 quarter. The company attributed this collapse to weak market demand and a deliberate shift toward higher-margin products—a strategy that effectively reduces cocoa purchasing. Consumer hesitation driven by chocolate price inflation has become a structural headwind.

The confectionery industry’s grinding activity—a reliable proxy for chocolate production—paints an even bleaker picture. The European Cocoa Association reported on January 15 that Q4 European grindings fell 8.3% year-over-year to 304,470 metric tons, far worse than the anticipated 2.9% decline and the lowest fourth-quarter performance in over a decade. Asia fared somewhat better but still contracted, with the Cocoa Association of Asia noting a 4.8% year-over-year decrease in Q4 grindings to 197,022 metric tons. Only North America showed resilience, recording a marginal 0.3% uptick to 103,117 metric tons. These numbers demonstrate that consumer demand across major chocolate manufacturing regions remains tepid, providing no lift for cocoa futures prices.

Africa’s Rising Exports: The Pressure Point on Cocoa Prices

Africa’s cocoa producers—desperately seeking cash—are pushing more beans into the market, amplifying the downside pressure. Nigeria, ranking fifth globally in cocoa output, ramped up December exports 17% year-over-year to 54,799 metric tons according to Bloomberg, adding fresh supplies when the market needed the opposite. Conversely, the Ivory Coast—the world’s top producer—is delivering shipments more slowly. Official data shows Ivorian farmers delivered 1.27 million metric tons to ports between October 1, 2025, and February 8, 2026, representing a 3.8% decline versus the prior-year period. This slower pace provides marginal support to cocoa futures prices but proves insufficient to offset Nigeria’s export surge and the global surplus.

Weather and Harvest: A Long-Term Challenge for Prices

The meteorological picture offers little comfort for market bulls. Tropical General Investments Group noted that optimal growing conditions across West Africa are expected to substantially boost the February-March harvest in both Ivory Coast and Ghana. Farmers are reporting larger, healthier pods compared to last year—a sign that next season’s production may prove even more abundant. Mondelez, a major chocolate manufacturer, corroborated this outlook, disclosing that the current West African cocoa pod count sits 7% above the five-year average and significantly surpasses last year’s levels. The Ivorian main crop harvest has already commenced with farmers expressing optimism about quality and yield. All of this points toward sustained pressure on cocoa futures prices in the medium term.

Next Season’s Outlook: Will Production Ease the Pain?

There is one silver lining. The Cocoa Association of Nigeria anticipates that the country’s 2025/26 output will contract 11% year-over-year to 305,000 metric tons, down from an estimated 344,000 metric tons in 2024/25. This decline, if realized, would tighten global supplies meaningfully and potentially stabilize cocoa futures prices from their current depressed levels.

The ICCO has already begun revising forecasts downward. On November 28, the organization reduced its 2024/25 global surplus estimate to 49,000 metric tons from an initially projected 142,000 metric tons, and lowered its production forecast for the same period to 4.69 million metric tons from 4.84 million. Rabobank similarly revised its 2025/26 surplus projection to 250,000 metric tons, down substantially from 328,000 metric tons predicted in November. Even historical context provides some perspective: the ICCO previously estimated a deficit of 494,000 metric tons for 2023/24—the largest shortfall in over 60 years—which had then triggered a production rebound of 12.9% to 4.368 million metric tons before contracting in subsequent years.

Looking forward, market participants must grapple with conflicting signals. The current oversupply and demand weakness will continue weighing on cocoa futures prices in the near term. However, anticipated production declines and tightening supply forecasts suggest that cocoa futures prices may eventually find support once market participants adjust to a new equilibrium. Until then, traders should expect continued volatility and downward pressure on price levels.