This episode provides a concise briefing on the critical developments in the global cocoa market as of February 2, 2025.
As major producing regions face weather disruptions, export slowdowns, and mounting supply deficits, the cocoa market is entering a period of heightened volatility and structural risk.
Key Themes Discussed:
Ivory Coast Export Growth Slows Amid Harsh Harmattan Conditions
- Ivory Coast’s cocoa exports rose 24% year-on-year to 1.24 million metric tons, but the growth rate slowed from last month's 35% surge.
- Severe Harmattan winds—the driest in six years—are stressing trees, with visible signs such as yellowing leaves and withering pods, threatening future harvests.
Mixed Production Signals from Ivory Coast and Ghana
- Le Conseil Café-Cacao revised Ivory Coast’s 2024–25 production forecast upward to 2.1–2.2 million metric tons, up from a prior 2.0 million ton estimate.
- In contrast, Ghana—the world's second-largest cocoa producer—lowered its 2024–25 production forecast to 650,000 metric tons from 700,000, after recording a 23-year low harvest of 425,000 metric tons last season.
Nigeria’s Cocoa Export Surge Offers Temporary Relief
- Nigeria posted an 87% year-on-year increase in cocoa exports in December, reaching 46,696 metric tons.
- While significant, this growth alone is unlikely to offset the structural supply tightness emerging from West Africa's dominant producers.
Demand Side Pressures Emerge as Prices Rise
- European Q4 cocoa grindings fell 5.3% year-on-year to 331,153 metric tons—the lowest in over four years—highlighting demand erosion at elevated price levels.
- North American grindings also declined by 1.2%, signaling weakening global consumption amid sustained price pressures.
Severe Global Cocoa Deficit and Stockpile Collapse
- Global cocoa stockpiles fell 36% year-on-year to 1.041 million metric tons at the end of the 2023–24 season.
- The cocoa deficit widened to a record 478,000 metric tons, according to the International Cocoa Organization.
- Hershey and other major chocolate companies are seeking Commodity Futures Trading Commission (CFTC) approvals to procure cocoa through ICE futures, highlighting the acute nature of supply shortages.
Strategic Implications:
Tightening Global Supply Chain
- Continued adverse weather, disease outbreaks, and logistical challenges are straining available cocoa supplies and driving sustained price volatility.
Potential for Prolonged Price Spikes
- As inventories collapse and deficits widen, cocoa prices may experience sharp rallies, impacting chocolate manufacturers and consumers globally.
Structural Shifts in Producer Dynamics
- Nigeria’s rising export profile hints at longer-term shifts, but West African dominance remains central to global supply—and currently highly vulnerable.
Demand Erosion Risks
- High cocoa prices are beginning to depress grinding and consumption, which could lead to softer demand growth if price pressures persist throughout 2025.
