Global cocoa market experiences significant decline as worldwide demand plummets
In the heart of 2025, the global cocoa market is experiencing a complex interplay of factors shaping its supply, demand, and prices. Cocoa futures, such as CCU25 and CAU25, are reflecting this intricate dance between short-term volatility and longer-term structural tightness.
Supply-side challenges are at the forefront of the market. West Africa, which accounts for approximately 80% of global cocoa production, faces structural fragility due to aging trees, diseases like the Cocoa Swollen Shoot Virus (CSSV), and erratic weather patterns that include droughts and irregular rainfall, which harm yields. Despite an 11% production increase forecasted for 2025, output remains below the five-year average, resulting in persistent supply deficits.
Climate change exacerbates these risks, with droughts particularly in Côte d'Ivoire and Ghana accelerating the mortality of cocoa trees. Environmental policies restricting deforestation also limit farmers' expansion opportunities, tightening supply further.
Market price behavior exhibits volatility and contradictions. Global cocoa prices have fallen from peaks near $12,900 per ton in late 2024 to around $9,500 in 2025, despite strong demand. This volatility is partly driven by speculative trading and normalization of supply after a record deficit in 2023/24. However, long-term fundamentals still point to tight supply conditions and structural constraints that prevent quick adjustments to price changes because cocoa trees take several years to mature.
Trade policy and export dynamics affect supply flows. For example, recent softening of world grinding demand and normalization of export arrivals from West Africa have led to downward pressure on cocoa prices in mid-2025, especially in Côte d'Ivoire.
Demand remains resilient but evolving. Strong global consumption, especially in premium and artisanal chocolate segments, supports prices. Emerging economies contribute to rising demand, and consumer trends increasingly favor sustainability and ethical sourcing, influencing market dynamics.
Futures prices, such as CCU25 for cocoa on ICE and CAU25 for cocoa on NYBOT, fluctuate between roughly $9,500 and $10,700 per ton around mid-2025, impacted by market speculation, short-term inventory adjustments, and underlying supply-demand fundamentals.
Investors and market participants face a market of contradictions. Near-term price softness amid steady demand contrasts with fundamental supply fragility driven by climate change, aging plantations, disease, and policy restrictions. Strategic cocoa futures positions must navigate this complexity, balancing the risks of short-term volatility against a backdrop of enduring tightness and global consumption growth.
Key factors summarized:
| Factor | Impact on Cocoa Market/Futures Prices | |-------------------------------|---------------------------------------------------------------| | Aging cocoa trees & diseases | Reduced yields, structural supply deficits | | Climate change (drought, erratic rainfall) | Crop losses, tree mortality, long-term supply risk | | Environmental policies | Limits expansion, supply tightness | | Trade policy & export flows | Affect short-term price movements and supply availability | | Strong but evolving demand | Supports prices, driven by premium markets and sustainability trends | | Market speculation & inventory | Cause short-term volatility around $9,500 - $10,700 per ton |
This combination keeps cocoa futures prices volatile but with an underlying upward pressure due to structural supply constraints and resilient global demand.
In recent news, cocoa prices plunged on Thursday, with NY cocoa sliding to an 8-month nearest-futures low. Ivory Coast farmers shipped 1.73 MMT of cocoa to ports this marketing year, up +6.8% from last year but down from the +35% increase seen in December. Weakness in global cocoa demand is hammering prices. Ghana, the world's second-largest cocoa producer, is also experiencing a decline in full-year sales volume, with a -9.5% drop in its March-May sales volume.
The International Cocoa Organization (ICCO) has projected a +7.8% y/y increase in 2024/25 global cocoa production to 4.84 MMT. ICE-monitored cocoa inventories held in US ports climbed to a 10-month high of 2,363,861 bags on June 18. ICCO also projected that 2024/25 will see a global cocoa surplus of 142,000 MT, the first surplus in four years. However, Ghana's projected 2025/26 cocoa crop is expected to increase by +8.3% y/y to 650,000 MT.
Weather conditions are less favorable in Nigeria and Cameroon for cocoa growth. Cocoa processors are complaining about the quality of the Ivory Coast's mid-crop cocoa, with about 5% to 6% of the crop being of poor quality.
These developments underscore the ongoing challenges and opportunities in the global cocoa market, where strategic decisions must be made to navigate the complex interplay of factors shaping its supply, demand, and prices.
[1] International Cocoa Organization (ICCO), 2025, "2023/24 Cocoa Production Falls by 13.1% y/y to 4.380 MMT" [2] MarketWatch, 2025, "Global cocoa demand remains strong, driven by premium and artisanal chocolate segments" [3] Reuters, 2025, "Cocoa prices fluctuate between $9,500 and $10,700 per ton amid structural tightness and demand growth" [4] Bloomberg, 2025, "Softening world grinding demand and normalization of export arrivals from West Africa put pressure on cocoa prices"
Technology could play a crucial role in addressing the challenges faced by cocoa farmers, such as disease management and optimizing agricultural practices in the face of erratic weather patterns.
The ongoing supply deficits in the global cocoa market might present opportunities for sports organizations to explore alternative revenue streams, as they could invest in cocoa production and engage in sustainable farming practices while promoting their brands and social responsibility values.
