December ICE NY cocoa (CCZ25) at present is down -33 (-0.62%), and December ICE London cocoa #7 (CAZ25) is down -60 (-1.47%).
Cocoa costs are seeing weak spot after the Trump administration introduced final Friday that it might drop 10% reciprocal tariffs on commodities not grown within the US, together with cocoa. Nonetheless, US imports of cocoa from Brazil will nonetheless apparently be topic to the 40% US national-security tariff on Brazil. In 2023, Brazil was the fifth-largest cocoa producer on this planet.
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Indicators of a slowdown in cocoa exports from the Ivory Coast, the world’s largest cocoa producer, are a constructive issue for costs. Monday’s authorities knowledge confirmed that Ivory Coast farmers shipped 516,787 MT of cocoa to ports this new advertising and marketing yr, from October 1 by way of November 16, down -5.7% from 548,494 MT in the identical interval a yr in the past.
Since posting 6-week highs in early November, cocoa costs have retreated amid expectations of a bumper cocoa crop in West Africa. Reviews from Ivory Coast cocoa farmers said that cocoa timber are doing nicely, and up to date dry climate helped harvested beans dry, whereas cocoa farmers in Ghana stated favorable climate is permitting cocoa pods to develop rapidly.
Chocolate maker Mondelez not too long ago stated that the newest cocoa pod rely in West Africa is 7% above the five-year common and “materially increased” than final yr’s crop. The harvest of the Ivory Coast’s important crop has simply begun, and farmers are optimistic about its high quality.
Weak international cocoa demand can be bearish for costs. On October 30, the CEO of chocolate-maker Hershey stated chocolate gross sales this Halloween season have been “disappointing.” Halloween made up almost 18% of annual US sweet gross sales in 2024, second solely to Christmas. In the meantime, the Cocoa Affiliation of Asia on October 17 reported that Q3 Asia cocoa grindings fell by -17% y/y to 183,413, the smallest grindings for a Q3 in 9 years. The European Cocoa Affiliation on October 16 reported that Q3 European cocoa grindings fell -4.8% y/y to 337,353 MT, the bottom for a 3rd quarter in 10 years. The Nationwide Confectioners Affiliation reported that Q3 North American cocoa grindings rose +3.2% y/y to 112,784 MT, however the addition of recent reporting firms skewed the information. In associated information, North American gross sales quantity of chocolate sweet was down greater than -21% within the 13 weeks ending September 7, in comparison with the identical interval final yr, in keeping with knowledge from analysis agency Circana.
Shrinking ICE cocoa inventories are supportive for cocoa costs. ICE-monitored cocoa inventories held in US ports fell to a 7.75-month low of 1,766,644 baggage on Friday.
A supportive issue for cocoa is decrease cocoa manufacturing in Nigeria, the world’s fifth-largest cocoa producer. Nigeria’s Cocoa Affiliation initiatives that Nigeria’s 2025/26 cocoa manufacturing will fall by -11% y/y to 305,000 MT from a projected 344,000 MT for the 2024/25 crop yr. In associated information, Nigeria reported that its September cocoa exports have been unchanged y/y at 14,511 MT.
On Could 30, the Worldwide Cocoa Group (ICCO) revised its 2023/24 international cocoa deficit to -494,000 MT, the most important deficit in over 60 years. ICCO stated 2023/24 cocoa manufacturing fell by -13.1% y/y to 4.380 MMT. ICCO said that the 2023/24 international cocoa stocks-to-grindings ratio declined to a 46-year low of 27.0%. For 2024/25, ICCO estimated a worldwide cocoa surplus of 142,000 MT, marking the primary surplus in 4 years. ICCO additionally stated international cocoa manufacturing in 2024/25 rose by +7.8% y/y to 4.84 MMT.
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