Global Cocoa Market Faces Supply Pressures as Delivery Slowdown Triggers Futures Rally

Cocoa futures posted gains across major exchanges on Tuesday as a slowdown in shipments to West African ports sparked short-covering activity. New York and London cocoa contracts closed higher, reflecting a shift in market dynamics as supply tightening became evident in recent shipping data. The rebound follows weeks of downward pressure on cocoa prices driven by oversupply concerns and tepid global demand.

West African Cocoa Deliveries Decline Despite Optimistic Harvest Outlook

Ivory Coast, which produces roughly one-third of the world’s cocoa supply, showed a notable slowdown in port shipments during the current marketing season. Through early February 2026, cumulative deliveries to ports reached 1.23 million metric tons, representing a 4.7% decline compared to the same period in the prior year. This contraction contradicts farmer sentiment heading into the main harvest season.

Agricultural conditions in the region paint an optimistic picture. Tropical General Investments Group and chocolate maker Mondelez both reported stronger pod counts than historical averages. Farmers in Ivory Coast and Ghana are reporting larger and healthier cocoa pods compared with the previous year’s crop, suggesting the upcoming harvest could deliver robust yields. The main crop harvest in Ivory Coast has already commenced, with growers expressing confidence in crop quality.

However, Nigeria—the world’s fifth-largest cocoa producer—presents a different picture. Cocoa exports from Nigeria declined 7% year-over-year in November, and the country’s industry association projects that 2025/26 production will fall 11% to 305,000 metric tons. This supply tightening from a major producing nation provides underlying support for cocoa prices.

Chocolate Makers Grapple with Weakening Cocoa Demand Across All Regions

Global cocoa demand has become a significant headwind for prices. Barry Callebaut AG, the world’s largest bulk chocolate manufacturer, reported a sharp 22% decline in cocoa division sales volume for the quarter ending November 30. The company cited “negative market demand and prioritization toward higher-return segments” as drivers of the contraction.

Grinding data—a key indicator of cocoa processing demand—reveals widespread weakness across geographies. European cocoa grindings fell 8.3% year-over-year in the fourth quarter to 304,470 metric tons, marking the lowest quarterly result in 12 years and significantly undershooting analyst expectations of a 2.9% decline. Asian cocoa grindings contracted 4.8% year-over-year to 197,022 metric tons in the same period. North American grindings offered little support, rising just 0.3% year-over-year to 103,117 metric tons.

The underlying issue stems from elevated chocolate prices, which have dampened consumer purchasing. As chocolate manufacturers resist passing full cocoa cost increases to consumers, they face margin pressure and reduced order volumes. This demand destruction dynamic has proven resistant to recent price declines.

Supply Tightening Supports Cocoa Prices Amid Structural Deficit Concerns

Cocoa inventories tell a mixed story about near-term supply conditions. Stocks held at US ports recovered to a 2.5-month high of 1.78 million bags on Tuesday, rebounding from a 10.5-month low in late December. While rising inventories typically weigh on prices, this rebound may reflect front-running ahead of the upcoming West African harvest.

Forward-looking supply estimates from major analysts suggest a tightening market structure. StoneX forecasts a global cocoa surplus of 287,000 metric tons for the 2025/26 season, a more restrained outlook than earlier predictions. Rabobank recently revised its surplus estimate to 250,000 metric tons for 2025/26, down from a November projection of 328,000 metric tons, indicating growing recognition of supply constraints.

The International Cocoa Organization has provided critical context for understanding current market dynamics. In November, ICCO cut its 2024/25 global surplus estimate to 49,000 metric tons, a dramatic reduction from its previous 142,000 metric ton estimate. ICCO also lowered production forecasts to 4.69 million metric tons from 4.84 million metric tons, signaling recognition of supply challenges. This marks the first surplus projected for 2024/25 after four consecutive years of deficits, reflecting a structural shift in market fundamentals.

The preceding 2023/24 season had highlighted the severity of cocoa scarcity. ICCO had revised that year’s balance to a deficit of 494,000 metric tons—the largest shortfall in over 60 years—as production fell 12.9% year-over-year to 4.368 million metric tons. That extended deficit period shaped expectations for normalized supply as West African conditions stabilized.

With favorable growing conditions supporting potential harvest volume in West Africa, but structural demand weakness persisting globally, cocoa markets face competing pressures. Tuesday’s rally reflects traders’ recognition that supply growth may finally meet constrained demand, potentially stabilizing prices after months of decline. However, the outcome depends critically on whether the Ivory Coast and Ghana can deliver the robust harvests that current pod counts suggest.