Demand Concerns Weigh on Cocoa Prices

AAPL TSLA AMZN META AMD NVDA PEP COST ADBE GOOG AMGN HON INTC INTU NFLX ADP SBUX MRNA AAPL TSLA AMZN META AMD NVDA PEP COST ADBE GOOG AMGN HON INTC INTU NFLX ADP SBUX MRNA AAPL TSLA AMZN META AMD NVDA PEP COST ADBE GOOG AMGN HON INTC INTU NFLX ADP SBUX MRNA Stocks Demand Concerns Weigh on Cocoa Prices April 08, 2025 — 07:32 pm EDT Written by Rich Asplund for Barchart-> ay ICE NY cocoa (CCK25) today is down -247 (-3.07%), and May ICE London cocoa #7 (CAK25) is down -178 (-2.98%).Cocoa prices extended their three-session slide today, with NY cocoa falling to a 3-week low and London cocoa dropping to a 5-month low. Global trade war fears are weighing on cocoa prices on concern that consumer demand for cocoa and cocoa products will decline as the global trade war escalates and tariffs boost already-high cocoa prices. Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis. Last Thursday, NY cocoa rose to a 1-1/4 month high on signs of a weak mid-crop cocoa harvest in West Africa. According to Rabobank, late-arriving rains in the region have limited crop growth, and recent cocoa farmer surveys from the Ivory Coast and Ghana have been disappointing.Concern about the Ivory Coast's upcoming mid-crop is supporting cocoa prices. The mid-crop is the smaller of two annual cocoa harvests, which typically starts this month. The average estimate for this year's Ivory Coast mid-crop is 400,000 MT, down -9% from last year's 440,000 MT.Recent Ivory Coast cocoa exports have slowed, supporting prices. Monday's government data showed that Ivory Coast farmers shipped 1.44 MMT of cocoa to ports this marketing year from October 1 to April 6, up +11% from last year but down from the much larger 35% rise seen in December.Cocoa prices have been on the defensive over the past seven weeks, and NY cocoa fell to a 4-3/4 month low on March 21 due to an improving supply outlook. On February 28, the International Cocoa Organization (ICCO) forecasted a global cocoa surplus of 142,000 MT for 2024/25, the first surplus in 4 years. ICCO also projected that 2024/25 global cocoa production will rise +7.8% y/y to 4.84 MMT.The recovery in cocoa inventories is also bearish for prices. Since falling to a 21-year low of 1,263,493 bags on January 24, ICE-monitored cocoa inventories held in US ports have rebounded and climbed to a 5-1/2 month high last Thursday of 1,863,172 bags. Demand concerns are weighing on cocoa prices. Executives from chocolate makers Hershey and Mondelez recently warned that high prices are hurting demand. On February 4, Mondelez executives warned of a potential slowdown in chocolate demand when CFO Zarmella said, "We are seeing signs, particularly in parts of the world like North America, where cocoa consumption is coming down." Also, on February 18, the company warned that chocolate prices could rise as much as 50% due to the surge in cocoa prices, which would curb chocolate demand. In addition, Hershey executives said on February 6 that high cocoa prices are forcing it to reformulate recipes by replacing cocoa with other ingredients. Also on the bearish side, Nigeria reported on February 27 that its Jan cocoa exports jumped +27% y/y to 46,970 MT. Nigeria is the world's fifth-largest cocoa producer.High cocoa prices reduced cocoa demand in Q4, as seen in the quarterly grinding reports. On January 9, the European Cocoa Association reported that Q4 European cocoa grindings fell -5.3% y/y to 331,853 MT, the lowest in more than 4 years. Also, the Cocoa Association of Asia reported that Q4 Asian cocoa grindings fell -0.5% y/y to 210,111 MT, also the lowest in 4 years. In addition, the National Confectioners Association reported that Q4 North American cocoa bean grindings fell -1.2% y/y to 102,761 MT.Smaller cocoa supplies from Ghana, the world's second-biggest cocoa producer, are supportive for prices after Cocobod, Ghana's cocoa regulator, cut its Ghana 2024/25 cocoa harvest forecast in December for the second time this season to 617,500 MT, down -5% from an August estimate of 650,000 MT. The ICCO on February 28 said the 2023/24 global cocoa deficit was -441,000 MT, the largest deficit in over 60 years. ICCO said 2023/24 cocoa production fell -13.1% y/y to 4.380 MMT. ICCO said the 2023/24 global cocoa stocks/grindings ratio was 27.0%, a 46-year low. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart Grain Market Update: Volatility Reigns and a Skeptical View on Trade July Corn Futures Hit a 2-Week High Today and More Gains Could Be Just Around the Corner S&W Seed Company: This Bottom 100 Microcap Stock to Buy Has Potential to Sprout Ag Futures Markets Are Suffering a Severe Case of Tariff Indigestion.

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