Cocoa prices have fallen more than 40% since peaking at nearly $13,000/tonne in 2024, now trading below the key, psychological and technical zone $7,000/tonne.
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The drop comes as supply expectations improve and demand weakens, reversing last year’s rally fueled by drought, crop disease, and poor harvests in West Africa.
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Higher rainfall and tree blossoming in the Ivory Coast and Ghana are boosting production forecasts, easing fears of shortages.
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West Africa, responsible for 70% of global cocoa output, is expected to see rebounding harvests after last year’s severe weather and disease-driven slump.
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High cocoa prices combined with U.S. tariffs on chocolate risk further dampening consumer demand.
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Analysts see this as an additional headwind for prices heading into 2025.
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Rising production this year will significantly increase supply, helping correct the imbalance that drove prices higher in 2024.
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Rabobank expects a significant surplus in the 2025/26 season, with production gains across Ecuador, Brazil, Peru, Nigeria, and Cameroon, alongside recovery in West Africa.
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Cocoa prices are projected to trend gradually lower in the short and medium term, despite the potential for short-lived rebounds.
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Limited supply risks in the Ivory Coast and Ghana should keep prices above $3,000/tonne, even in a bearish scenario.
Looking at the cocoa chart, we can see the head and shoulders pattern, with futures prices now in line with the potential 'neckline' in the formation.
Source: xStation5
Source: xStation5
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