(Jan 30): Cocoa futures in New York fell below US$4,000 ($5,069) per metric ton for the first time since 2023, further erasing much of a blistering rally that has left the chocolate industry grappling with dwindling demand.
The most-active futures contract fell as much as 5.9% to US$3,931, the lowest level since November 2023. Prices extended a slump seen in recent weeks after cocoa processing reports signaled demand for beans was dampened by a prolonged period of elevated prices over the past two years.
The rout adds to a downturn across commodities, with gold and silver also plunging on Friday as the dollar strengthened.
Futures had reached an all-time high in December 2024 on the back of poor harvests in West Africa. Traders also rushed to the sidelines as it became costlier to maintain positions, exacerbating market volatility. The price shock prompted consumers to cut back on chocolate, and candy makers changed recipes to use cheaper substitutes and include more fillers like nuts. Prices have now retreated about 70% from that peak.
Cocoa processors in Europe — the world’s top consuming region — saw bean grindings in the fourth quarter drop to the lowest in data going back to 2013. Coupled with an uptick in production in some key growers, that’s putting the world on track for supply to outpace demand. StoneX this week raised its forecast for a global cocoa surplus in the current season, with another expected in the 2026-27 year.
The slump has already had an impact on producing countries. In top suppliers Ivory Coast and Ghana, governments set the local cocoa prices. The steep retreat in futures has created a mismatch between domestic and international prices, affecting exporters’ finances. In Ivory Coast, authorities recently said the country would help negotiate a loan to finance the purchase of cocoa from farmers, adding that beans were piling up in warehouses across the country.
See also: Copper sinks as frenzy in China ebbs at close of turbulent week
Uploaded by Magessan Varatharaja
