This episode provides a comprehensive overview of the cocoa market as of July 27, 2025.
- Ivory Coast is experiencing a notable reduction in both the volume and quality of its mid-crop cocoa. The crop is forecasted to reach 400,000 metric tons, reflecting a 9% year-over-year decline. Compounding concerns are rising defect rates, now at 5–6% per truckload compared to the usual 1%, raising alarms over quality.
- Export momentum from the region is slowing, as shown by a subdued 6.1% annual growth, a stark contrast to the 35% surge observed the previous December. Additionally, small cocoa firms are grappling with compliance issues related to new EU deforestation regulations, which may threaten their viability.
- On the demand side, global cocoa grindings are in decline. European grindings are down 7.2%, Asia's by 16.3%, and North America's by 2.8% year-over-year. These reductions are mirrored by weak financial results from major chocolate producers like Barry Callebaut and Lindt & Sprüngli. The bearish outlook is reinforced by rising U.S. inventories, now at a ten-and-a-half-month high, and a projected global surplus for the 2024–2025 season by the International Cocoa Organization.
- Despite these trends, the market remains volatile. A prior global deficit and falling production could prompt price spikes if supply disruptions or speculative activity arise. Long-term recovery would hinge on demand resurgence or further crop degradation. High input costs, such as those influencing Hershey’s decision to raise candy prices, underline the industry's strategic crossroads, where cost control and pricing decisions will be crucial.
