Cocoa prices fall for another week

After another week of declines, cocoa contracts closed on Friday (January 30) at 4,165 USD/t in New York and 2,913 GBP/t in London, after renewing their lowest levels in two years and accumulating weekly declines of 0.86% and 3.13%, respectively. Still influenced by the prospect of a surplus for the current cycle, news from the two largest global cocoa producers contributed to market volatility and supported technical movements observed throughout the week, in addition to dollar movements.

In Ivory Coast, the Coffee and Cocoa Council (CCC), the sector's regulatory body, announced that it intends to purchase of around 100,000 tons of surplus cocoa by the end of March, which was interpreted by the market as a sign of higher domestic stocks in the country. The increase in the farmgate price for the 2025/26 season contrasts with the recent significant drop in international prices, which has slowed the pace of sales and favored the entry of beans from neighboring countries, contributing to the formation of stocks in the country.

In this context, the country's cocoa port arrivals through January 25 totaled 1.2 million tons, a volume 3.46% lower than that recorded in the same period of the previous cycle. However, it is worth noting that part of this performance may be related to the temporary limitation on deliveries announced by the CCC in early December 2025, a measure adopted with the aim of alleviating port congestion and stimulating sales.

A similar situation is observed in Ghana, where the change in the marketing model adopted for the 2024/25 crop altered the dynamics of sales. In addition, the increase in the price paid to producers has contributed to a slower pace of marketing. Together, these factors can create operational challenges, such as possible delays in payments, which tend to limit investments in crops and may affect production performance in future cycles if the scenario persists.

Furthermore, both in Ghana and, especially, in Ivory Coast, the world's largest producer, above-average rainfall was recorded in relevant regions during the dry season, which may have had a specific impact on logistics and the volumes of cocoa delivered to the country's ports. Overall, the weather conditions observed contribute to improving production expectations at the end of the main crop and for the mid-crop, which begins in April. However, the weather remains a factor that requires continuous monitoring.

Nevertheless, it is important to note that the prospect of a surplus is more associated with a decline in demand than with a significant increase in supply, which tends to keep market volatility high.

In this context, in addition to grinding results from the main processing regions indicating a further decline in the last quarter of 2025, the market remains attentive to the release of financial results from major processors and chocolate manufacturers, some of which will be released next week, with a special focus on sales volumes. Companies with greater exposure to the North American market may perform relatively better on this indicator if they follow the region's griding pattern, which registered a slight increase, in contrast to the decline observed in Asia and Europe in relation to the fourth quarter of 2025. This set of factors tends to keep the market more sensitive in the short term, especially considering that technical indicators, such as the RSI, remain in oversold territory.

Finally, despite recent corrections, it is worth noting that a significant part of the industry has purchased raw materials at still high prices, and that cocoa continues to trade at historically high levels. Given the measures adopted to adapt to this price environment, such as portfolio adjustments and product reformulations, as well as changes in consumption patterns, any positive impacts on demand are likely to occur gradually, limiting a more immediate recovery in grinding.

The cocoa market remains under pressure from the prospect of a surplus for the 2025/26 cycle, a scenario that has been reinforced by signs of improvement in production conditions in West Africa and, above all, by persistently weak global demand. In Ivory Coast, above-average rainfall in key regions during the dry season has contributed to improved production expectations for the end of the main crop and for the mid-crop, while institutional measures and marketing barriers have impacted the pace of deliveries and inventory dynamics.

The grinding data already released confirm a weakened consumption environment in the main processing regions, with the relative exception of the North American market. In this context, the market is closely monitoring the release of financial results from major processors and chocolate manufacturers, with particular attention to the behavior of sales volumes, which may bring additional volatility in the short term, especially in a scenario where technical indicators, such as the RSI, remain in oversold territory.