This episode provides a concise briefing on the evolving dynamics of the global cocoa market as of January 26, 2025.
With cocoa supply tightening due to extreme weather and production cuts, the sector braces for continued volatility amid strategic responses from major market players.

Key Themes Discussed:

Ivory Coast Cocoa Exports Surge Despite Weather Challenges

• Ivory Coast’s cocoa exports rose to 1.2 million metric tons, marking a 26% year-on-year increase.
• However, this growth slowed from the prior month’s 35% surge, as trees show signs of severe stress from the driest Harmattan winds in six years.

Ghana's Production Collapse and Financial Crisis

• Ghana’s cocoa board lowered its 2024–25 production forecast to 650,000 metric tons, down from 700,000, following a 23-year low harvest of 425,000 metric tons.
• The production collapse triggered serious financial repercussions, including a default on an $800 million cocoa purchase loan and delays in deliveries shifting 370,000 metric tons into the next season.

Nigeria's Export Growth Offers Limited Relief

• Nigeria's cocoa exports rose 35% year-on-year to 38,015 metric tons as of November 2024, reinforcing its position as the world’s sixth-largest producer.
• This growth provides some downward pressure on cocoa prices, but remains insufficient to offset broader global supply deficits.

Global Supply Constraints Meet Demand Destruction

• Global cocoa inventories have plummeted to a 21-year low, exacerbated by lower-than-expected exports from major players like Ivory Coast.
• Meanwhile, grindings are falling in Europe, Asia, and North America, signaling demand destruction as soaring prices erode consumption levels.

Strategic Implications:

Tightening Supply Outlook

• Severe crop stress, supply shortfalls, and financial instability point to a protracted period of supply-side tightness.

Persistent Price Volatility Ahead

• With supply constrained and demand weakening, cocoa prices are expected to remain highly volatile through 2025.

Stockpiling and Supply Security Measures

• Major chocolate companies, notably Hershey Co., are aggressively securing cocoa futures to manage anticipated shortages.

Emerging Shifts in Market Dynamics

• As traditional producers face deeper structural challenges, emerging players like Nigeria could gradually assume greater relevance in global supply chains.