Cocoa markets experienced a significant decline after the International Cocoa Organization (ICCO) unexpectedly forecasted a surplus of 142,000 tonnes for the 2024-25 marketing year. This marked a shift from the previous three years of global cocoa deficits. The projection, released on February 28, surprised industry participants, with the May New York cocoa futures contract dropping 10% to $8,212 per tonne and London cocoa futures closing nearly 11% lower at $6,567 per tonne.
The ICCO attributed the surplus to improved production, particularly in the world’s two largest cocoa producers, Ivory Coast and Ghana, and weakened global demand. The forecast for global cocoa production in 2024-25 is 4.84 million tonnes, a 7.8% increase from the previous season. Ivory Coast is expected to produce 1.85 million tonnes, up from 1.67 million tonnes, while Ghana’s production is projected to rise to 600,000 tonnes from 530,000 tonnes.
However, the ICCO noted that global cocoa grindings are expected to fall by 4.8% to 4.65 million tonnes, reflecting weaker demand. Data showed a 3.2% year-on-year decline in fourth-quarter cocoa grind, the lowest since 2017, aside from the pandemic-affected period in 2020. High input costs and shifting strategies in chocolate production have contributed to the downturn in demand for cocoa.