Cocoa Market Shifts as Delivery Pace from Ivory Coast Slackens

The pace of cocoa shipments from the world’s top producer has decelerated, igniting a sharp market reversal. On Tuesday, March ICE NY cocoa futures jumped +90 points (+2.14%), while March ICE London cocoa #7 climbed +91 points (+3.04%), marking the second consecutive session of gains. This rally reflects a fundamental shift in market sentiment as traders cover short positions amid signs of tightening supplies.

Weakening Supply Flow Triggers Short Covering

The slowdown in the pace of cocoa deliveries to Ivorian ports has become the market’s focal point. According to cumulative shipping data through early February in the 2025/26 marketing year (which began October 1), Ivory Coast farmers transported 1.23 MMT of cocoa to ports—a 4.7% decline compared to 1.24 MMT during the same window last year. This deceleration in shipment pace contradicts the abundance narrative that dominated earlier this year, when cocoa futures hit multi-year lows before Friday’s 2.25-year low in NY and 2.5-year trough in London.

The supply picture remains complex. While Ivory Coast faces a slowing pace of deliveries, favorable meteorological conditions in West Africa are expected to support the February-March harvest in both Ivory Coast and Ghana. Pod counts reported by chocolate maker Mondelez indicate levels 7% above the five-year average, suggesting the potential for improved supply flows as farmers bring crops to market. However, Nigeria—ranked fifth globally—is offering countervailing support to prices through production constraints, with November exports falling 7% year-over-year to 35,203 MT. Nigeria’s Cocoa Association projects a sharper contraction ahead, forecasting 2025/26 production at 305,000 MT, down 11% from the previous year’s estimated 344,000 MT.

Demand Headwinds Continue to Weigh on Prices

Consumer resistance to elevated chocolate prices remains a structural headwind for the commodity. Barry Callebaut AG, the world’s largest bulk chocolate manufacturer, revealed a stark 22% drop in cocoa division sales volume for the quarter ending November 30, attributing the decline to “negative market demand and prioritization toward higher-return segments.” This weakness is corroborated by grinding data across all major consuming regions.

The European Cocoa Association reported fourth-quarter grindings of 304,470 MT, representing an 8.3% year-over-year decline and marking the lowest Q4 performance in 12 years—substantially worse than the anticipated 2.9% contraction. Asia’s fourth-quarter grindings fell 4.8% year-over-year to 197,022 MT, while North America managed only a negligible +0.3% increase to 103,117 MT. These figures underscore persistent demand softness despite the recent price rally.

Global Inventory Rebound Limits Price Recovery

Physical cocoa holdings have become increasingly accessible to buyers, constraining upside potential. ICE-monitored inventories in US ports touched a low of 1,626,105 bags on December 26 but have since rebounded to 1,782,921 bags by Tuesday—a 2.5-month high. This inventory reaccumulation serves as a bearish factor, suggesting ample supply availability for chocolatiers and processors willing to purchase at current levels.

Production Outlook Offers Mixed Signals for the Market

The longer-term supply balance remains contested between deficit and surplus scenarios. The International Cocoa Organization had previously slashed its 2024/25 surplus estimate to 49,000 MT in November—a dramatic revision from the earlier 142,000 MT forecast and the first surplus in four years following the massive 494,000 MT deficit recorded in 2023/24. For the current 2025/26 season, StoneX projects a surplus of 287,000 MT, while Rabobank recently trimmed its estimate to 250,000 MT from an earlier November projection of 328,000 MT.

These competing supply outlooks suggest that while the recent pace of deliveries has slowed and traders are repositioning, the fundamental backdrop of ample global supplies and weak demand may ultimately constrain any sustained rally in cocoa prices. Market participants remain caught between tactical short covering and strategic bearish positioning.