Cocoa Futures Move Higher

Cocoa prices rose slightly above $3,000 per tonne, recovering from near three-year lows of $2,888 hit in late February. The rebound reflected technical buying rather than a shift in market fundamentals, which remain dominated by prospects of abundant supply and weak demand. Favorable weather has improved production prospects in key West African producers, with South American output, particularly from Ecuador, also on the rise. On the other hand, slowing global demand has driven a notable accumulation of stockpiles. Hedgepoint Global Markets on February 27 estimated a 2025/26 global surplus of 365,000 tons, with Ivory Coast producing 1.78 million tons, Ghana 650,000 tons, and Ecuador 615,000 tons. At the same time, ICCO raised its 2024/25 surplus estimate from 49,000 to 75,000 tonnes. World output for 2024/25 is now projected at 4.728 million tons, up from the previously projected 4.698 million tons, and representing an 8.4% increase from the 4.362 million tonnes recorded in 2023/24.

Cocoa decreased to 2951.00 USD/T, the lowest since April 2023. Over the past 4 weeks, Cocoa lost 28.64%, and in the last 12 months, it decreased 66.36%.

Cocoa prices eased to below $3,000 per tonne, the lowest since May 2023, as the market remained pressured by sluggish demand, ample supply and expectations of a strong harvest in major producing countries. In the meantime, large volumes of cocoa remain unsold in top growers Ivory Coast and Ghana, as buyers are reluctant to pay official farm-gate prices above world levels, limiting governments’ ability to keep prices high. Ivory Coast is reportedly considering cutting the price it pays cocoa farmers to align with Ghana, responding to a sharp decline in global cocoa prices. Latest data showed ICE cocoa inventories rose to a 5.25-month high of 2,111,554 bags as of February 20. Regarding crop developments, farmers in Ivory Coast reported adequate soil moisture, which should improve the quality and size of the upcoming April-to-September mid-crop. With normal rains expected in March, they foresee no shortages and predict the crop will be larger and of higher quality than last season.