Cocoa bean prices are below $4,000 for the first time since 2023, driven by falling demand

The price of cocoa bean futures on the New York Exchange fell below $4,000 per ton for the first time since 2023. This followed a rapid price rise that led to a decline in demand in the chocolate industry, according to market participants surveyed by Bloomberg.

The most actively traded futures contract fell 5.9% to $3,931,000 (the lowest level since November 2023). Prices continued the decline seen in recent weeks following the release of cocoa bean crushing reports, which showed that demand for the beans had declined due to a prolonged period of high prices over the past two years.

Cocoa bean futures reached an all-time high in December 2024 amid crop failures in West Africa. The price shock prompted consumers to cut back on chocolate, and candy makers changed recipes, using cheaper substitutes and adding more fillings, such as nuts. Prices are now down approximately 70% from their peak.

Forecast

StoneX has raised its forecast for a global cocoa surplus this season, expecting another surplus in 2026–2027.

In Europe, the world’s largest cocoa bean-consuming region, crushing volumes in the fourth quarter fell to their lowest level on record since 2013. Meanwhile, cocoa-supplier countries increased production.

“There is a significant oversupply of physical inventory,” said Jonathan Parkman, head of agricultural commodities sales at London-based brokerage Marex Group. “We’ve passed that point, and it’s not uncommon at this point in January, when we have excess paper stocks, that is, hedging against production demand, and we’re also starting to see excess physical stocks emerge,” he explained.

The downturn has already impacted producing countries. In leading supplier countries, Côte d’Ivoire and Ghana, governments set local cocoa prices. The sharp drop in exchange prices has created an imbalance between domestic and international prices, negatively impacting exporters’ finances. Côte d’Ivoire authorities have announced they will negotiate a loan to finance the purchase of cocoa beans from farmers, as the harvest is piling up in warehouses across the country.

Tags: prices, cocoa