FX.co ★ Cocoa Futures Remain Subdued

Cocoa prices hovered around $3,000 per tonne, near their lowest level since May 2023, as expectations of ample supply and weak demand continued to shape the market. Favorable weather has improved production prospects in key West African countries, while higher output in South America, particularly Ecuador, is also adding to supply. On February 27, Hedgepoint Global Markets forecast a global surplus of 365,000 tons for the 2025/26 season, with output in Ivory Coast projected at 1.78 million tons, Ghana at 650,000 tons, and Ecuador at 615,000 tons. At the same time, the ICCO raised its 2024/25 global surplus estimate from 49,000 to 75,000 tonnes.

On the demand side, slowing global consumption has led to a significant build-up of inventories in major producing countries such as Ivory Coast and Ghana. In response, both nations recently cut the prices paid to farmers to reflect declining international cocoa prices. In recent months, exporters had already been delaying cocoa purchases because domestic prices remained well above international market levels.