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Cocoa prices have been in a downtrend over the last week, with futures on their longest losing streak in nearly three years. A tamping down of tariff concerns and improved weather in West Africa contributed to the selling pressure.
Cocoa futures in New York were 5.4% to $9,140 a ton in late morning trading to trade at their lowest level in more than three weeks. The 52-week high for the contract is $12,646.07.
The U.S. government imposed a blanket 10% tariff on most imports this year, including cocoa, as part of a broader trade policy shift. The tariffs are not uniform and vary by country of origin and cocoa product type. Companies have also been actively pushing for exemptions. The last week has seen generally positive news on the tariff front, which has worked itself into the cocoa trading pits as the worst-case tariff scenarios appear more unlikely.
Meanwhile, widespread rainfall in West Africa, where the bulk of the global cocoa supplies are sourced, has improved the outlook from traders on supply. However, a drought still covers more than a third of Ghana and the Ivory Coast, according to the African Flood and Drought Monitor.
“There’s been some uncertainty about the weather and the impact on the crops but things are looking better than they were a month ago,” stated Steve Wateridge, head of research at Tropical Research Services by Expana. “We are destroying so much demand and there’s a strong argument that the market at the moment is overvalued unless we get poor crops,” he added.
Last week, the International Cocoa Organization issued a key report on the industry.
On the demand side, the International Cocoa Organization highlighted that Q1 2025 quarterly grinding data from major cocoa associations revealed a decline. The European Cocoa Association reported a drop of 3.7% (to 353,522 tons), the Cocoa Association of Asia reported a decline of 3.44% (to 213,898 tons), and the National Confectioners Association reported a decline of 2.45% (to 110,278 tons).
“Although quarterly grindings were negative, they were better than analysts’ expectations. The grinding data signaled some demand resilience and boosted prices. With uncertainty concerning the mid-crop lingering, there are five months remaining until the end of the season. The next five months will be interesting as progress in market fundamentals will provide a clearer view of the cocoa market outlook.”
Some of the companies that have mentioned the impact of high cocoa prices during earnings conference calls include Mondelez International (MDLZ), Lindt & Spruengli AG (OTCPK:LDSVF), Olam International (OTCPK:OLGPF), Nestlé S.A. (OTCPK:NSRGY), Conagra Brands (CAG), Simply Good Foods (SMPL), PepsiCo (PEP), Chocoladefabriken Lindt & Sprüngli AG (OTCPK:LDSVF), 1-800-Flowers.com (FLWS), Barry Callebaut AG (OTCPK:BYCBF), J.M. Smucker Company (SJM), Rogers Sugar (OTCPK:RSGUF), Rocky Mountain Chocolate Factory (RMCF), Costco (COST), Tootsie Roll Industries (TR), Rogers Sugar Inc. (OTCPK:RSGUF), Associated British Foods plc (OTCPK:ASBFY), and J&J Snack Foods (JJSF).