Cocoa Prices Rebound as Ivory Coast Shipments Dip, Signaling Tightening Supply
Cocoa futures staged a modest recovery in Monday's trading session, with benchmark contracts in New York and London climbing higher. The move was fueled by fresh data indicating a slowdown in deliveries to ports in Ivory Coast, the world's largest cocoa producer, prompting traders to cover short positions.
According to cumulative figures, Ivorian farmers have shipped 1.23 million metric tons (MMT) of cocoa to ports for the current marketing year (October 1, 2025 – February 1, 2026). This represents a 4.7% decline from the 1.24 MMT recorded during the same period last year, injecting a note of supply concern into a market recently focused on weak demand.
The price increase marks a pause in a broader downtrend. Just last Friday, cocoa prices in both New York and London hit multi-year lows, pressured by forecasts of substantial global surpluses and slack consumption. Analytics firm StoneX recently projected a surplus of 287,000 MT for the 2025/26 season, while the International Cocoa Organization (ICCO) reported a 4.2% year-on-year increase in global stocks to 1.1 MMT as of late January.
Demand headwinds remain significant. Consumers continue to resist high chocolate prices, impacting major processors. Barry Callebaut AG, the leading bulk chocolate maker, reported a stark 22% drop in sales volume for its cocoa division in its latest quarter, attributing it to "negative market demand." Grinding data from Europe and Asia for the fourth quarter of 2025 showed year-on-year declines of 8.3% and 4.8%, respectively, underscoring the soft consumption trend.
However, the supply picture is presenting mixed signals. While favorable growing conditions in West Africa point to a potentially robust upcoming harvest in Ivory Coast and Ghana, output from other regions is under pressure. Nigeria, the world's fifth-largest producer, saw its November exports fall 7% year-on-year, with its Cocoa Association projecting an 11% drop in production for the 2025/26 season.
This has led some analysts to revise their surplus expectations downward. Rabobank, for instance, recently trimmed its forecast for the 2025/26 global cocoa surplus. The ICCO has also progressively lowered its surplus estimates for the current season, noting that the market is emerging from a historic deficit of nearly 500,000 MT in the 2023/24 cycle—the largest in over six decades.
Market Voices:
"This is likely just a technical bounce in a bear market," says Marcus Thorne, a veteran softs trader in London. "The fundamental weight of large stocks and poor grind figures hasn't vanished. Until we see sustained demand recovery, rallies will be sold into."
Eleanor Shaw, a sustainability analyst focusing on West Africa, offers a broader view: "The price volatility masks deeper structural issues. Short-term weather benefits are welcome for farmers, but the long-term challenges of crop disease, aging trees, and farmer income sustainability are what will dictate true supply stability."
A more pointed reaction comes from David Keller, a portfolio manager at a consumer staples hedge fund: "It's absurd. The market is clutching at a tiny delivery dip while ignoring a mountain of bearish evidence. Chocolate sales are in the gutter, inventories are swelling, and yet we get a price pop on a rounding error in the data. This is pure speculative noise, not a change in trend."
On the date of publication, the author did not have positions in any securities mentioned. All information and data is for informational purposes only. Adapted from source material.