Cocoa market reacts to mixed grinding data

Cocoa futures ended the week of April 17 with a slight weekly decline of 1.85% in New York and 1.28% in London, following a week of sharp fluctuations. The volatility was caused by the release of grinding results for the first quarter of 2026, which showed varying figures among the main processing regions and sent mixed signals regarding demand for cocoa beans. This Monday, April 20, cocoa prices moved higher again, likely influenced by the macroeconomic backdrop and developments in the conflict between the US and Iran, although the market remains cautious in light of the recent demand data, which is the focus of this analysis.

The first data released came from Malaysia, which accounts for 32% of Asia’s processing volume, showing an 8.7% increase for the period in question, a figure above market expectations and supporting an 8.51% recovery in New York and a 6.70% recovery in London during the April 14 session. The country’s net cocoa import data, although not directly related to grinding given the significant role of stocks, indicates a recovery between November and December, which may signal some support for industrial activity in the region. This performance was reflected in a 5.2% increase in Asian grinding, which accounts for approximately 23% of global processing.

However, the recovery observed in cocoa futures did not hold. Looking at Europe, the main processing region accounting for about 35% of global grinding, data from the European Cocoa Association shows a 7.8% drop in cocoa bean grinding for the period under review. 

The result, although slightly above market expectations, contributed to prices returning part of the gains recorded in the previous session. The region’s net cocoa beans imports fell to historically low levels between December 2025 and January 2026, which may reflect industrial activity. However, a recovery in net imports was observed in February and March, suggesting a possible normalization of the flow that may be reflected in the next quarter’s grinding data.

A decline was also observed in North America. Data from the National Confectioners Association indicate a 3.8% drop in grinding during the period analyzed. Considering the US’s net cocoa beans imports, which for the current crop year (October 2025 to January 2026) remain above last year levels and close to the historical average, part of the market had expected greater stability or even a slight recovery in activity during the quarter.

However, cumulative net imports of cocoa butter and cocoa paste rose by 23.7% and 49.1%, respectively, compared to the previous crop year, which may have reduced the need for processing cocoa beans. Consequently, as the results were released after the market closed, the data impacted the following session, when contracts fell 5.38% in New York and 4.08% in London.

In addition to the performance of the main regions, the financial results reported by major processors in the sector continue to point to a decline in sales volumes in recent months, reinforcing the view that demand for cocoa remains under pressure. In the coming quarters, the sharp price corrections observed recently may begin to influence grinding activity. However, this potential effect remains uncertain and will depend on the consolidation of a more consistent improvement in the demand environment, meaning that signs of recovery in the medium term remain contingent on these developments.  

Cocoa futures ended the week of April 17 slightly lower, despite the high volatility observed throughout the period, reflecting the release of first-quarter 2026 grinding data that provided mixed signals regarding global demand. While Asia posted positive performance, driven mainly by Malaysia, Europe and North America recorded a decline in grinding, putting pressure on prices following the market’s initial reactions. These figures, combined with the still-weak sales volumes reported by major processors, maintain a cautious outlook for the short term and keep the market alert for the potential impacts of the more intense price corrections observed recently on grinding dynamics in the coming quarters.