The cocoa market is going through a period of intense volatility, with futures contracts registering sharp drops. At the beginning of October, prices reached their lowest levels in a year, accumulating weekly reductions of more than 10%.
This decline marks a significant correction after a cycle of appreciation that propelled the price of cocoa to historic highs. This change in trend is linked to multiple factors, such as adverse weather conditions, logistical challenges, the global macroeconomic scenario and a reduction in demand.
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Cocoa prices have fallen sharply recently due to supply pressure in the market and technical factors, after a period in which they reached levels considered unsustainable in the long term.
At the beginning of October, futures contracts on the cocoa market accumulated weekly falls of more than 10%. In New York, the price fell to around US$ 6,190 per ton in the week of October 3, while in London it was around 4,288 GBP/t. This significant downward movement comes after the commodity reached its peak in December 2024, when it traded above US$ 12,000 per ton in New York. Since August, the market has been going through a gradual downward adjustment in prices.
According to Carolina França, market intelligence analyst at Hedgepoint, supply pressure increased after the minimum prices paid to producers in Ghana and Côte d'Ivoire were updated. Côte d'Ivoire raised the price guaranteed to farmers by more than 25%, to around US$5,000 per ton. Ghana, on the other hand, increased the price to around US$4,600. This increase in the prices paid to producers, together with the return of the rains in West Africa, reinforces the expectation of greater grain availability at the start of the 2025/26 harvest.
The fall in prices on the cocoa market is also related to weaker global demand, reflecting the previous scenario of high prices. The global grinding volume, which indicates the use of cocoa by the industry, has decreased by around 500,000 tons since the peak in 2022.
In the case of the Cocoa Association of Asia (CAA), the drop was 17.08%, influenced above all by the significant reduction observed in Malaysia, where the volume processed was 35.1% below that recorded in the same quarter of 2024. Even so, positive results in countries like Indonesia and Singapore helped to soften the regional downturn.
Despite the forecast recovery in supply, ICE (New York Stock Exchange) certified stocks remain well below the historical average, although they are increasing from the lowest levels at the start of the year.
In addition, the uncertain global macroeconomic scenario continues to influence the market. The positioning of cocoa investment funds remains cautious, due to the shutdown in the United States. This change in monetary policy affects activities and consumption. Through the dollar, monetary policy also influences the performance of other currencies and the commodities markets.
In Europe, according to the latest data from ICE Futures Europe, speculators increased their net short positions by 2,552 lots by October 21, bringing the total to 15,609 lots.
The weather is a crucial factor for the cocoa market, as unfavorable conditions in the coming months could reduce delivery potential in West Africa, the main producing region. The initial outlook for the 2025/26 harvest indicates the possibility of a surplus, but the volume of this surplus will depend on a balanced water regime in the coming months. The occurrence of rainfall at important moments, even if the total accumulated in the 2024/25 harvest was below average, helped the fruit develop and ensure a higher survival rate.
In this respect, a balanced climate is still needed over the coming months, especially November, which will influence the final performance of the main crop and the start of the West African intermediate crop.
The NOAA/CPC (US Climate Prediction Center) has increased the chance of a La Niña phenomenon occurring between October and December to 71%. This weather event usually brings more humidity and milder temperatures to West Africa, which can reduce the risk of water stress in the dry season.
However, there are concerns about how La Niña could affect the "Harmattan" winds, dry, dust-laden currents that can compromise fruit development. In Ecuador, La Niña may result in reduced rainfall at the start of the rainy season, which requires greater attention to soil moisture. Climatic risks, plantation diseases and ageing trees continue to be important structural challenges for the sector. For these reasons, the market is unlikely to return to the levels of US$2,000 to US$3,000 per ton seen before 2023.
The period of record prices and supply shortages that prevailed in the market before the recent price correction weakened global demand and drastically altered the flow of imports. The main impacts are seen in the retraction of purchases from the European Union and the increase in Ecuador's share of imports from the United States.
In the US, total net cocoa imports grew by almost 70% compared to the previous year, returning to levels close to the historical average. This result suggests that demand is more resilient than in other regions and helped maintain grinding in the region, which grew slightly.
In the accumulated period from January to July 2025, Ecuador supplied around 30% of the total almonds received by the US. This is a significant increase compared to the average of just 13% over the last five years. The increase in Ecuador's share occurred at the same time as Côte d'Ivoire and Ghana had a lower share. The composition of products imported by the United States has also changed. The share of cocoa butter rose from 15% in 2024 to 20% in 2025. Meanwhile, cocoa powder imports fell from 17% to 15%, a move possibly linked to the increase in the price of this item.
In the European Union, the scenario is different. The net accumulated total of imports is still almost 3.99% below the previous year. The drop is a direct result of higher purchasing costs. Europe has seen a sharper decrease in grinding, possibly influenced by the lower quantity of imports. Europe's preference for higher quality African almonds keeps costs high, as Côte d'Ivoire and Ghana have higher price differentials compared to other origins.
Initial projections for the 2025/26 harvest indicate the possibility of a surplus. Hedgepoint's forecast is that the surplus volume could be close to 360,000 tons, a considerable increase on the projected surplus of 37,000 tons for the 2024/25 cycle. This projection is based on a more positive outlook in West Africa, an increase in production in countries like Ecuador and a decrease in crushing.
Despite the expectations for the next cycle, the global balance between supply and demand remains tight, which keeps instability high and reinforces the market's sensitivity to new climatic, commercial and crushing data capable of quickly altering the scenario.
The cocoa market is going through a period of transition, influenced by price corrections, climatic factors and global changes in supply and demand. In this scenario, following up-to-date data and expert analysis is key to identifying movements and opportunities.
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