West African Cocoa Pod Counts Surge, Sparking Price Recovery

Cocoa futures rallied sharply on Monday as West African producing countries tightened supply pipelines and favorable crop indicators emerged from the region. March ICE NY cocoa jumped 3.50% to close up 147 points, while March ICE London cocoa rose 2.43% with a gain of 73 points. The recovery marks a rebound from a devastating two-week decline that had driven New York cocoa to its lowest level in two years and London cocoa to a 2.25-year bottom last Friday.

The turnaround reflects a confluence of factors reshaping the market landscape, with West African farmers strategically reducing shipments amid depressed prices while simultaneously reporting robust cocoa pod counts that signal a promising harvest ahead. This supply-demand dynamic, combined with dollar weakness, has positioned cocoa prices for potential stabilization after months of downward pressure.

Supply Constraints Lift Cocoa Prices

Ivory Coast, the world’s dominant cocoa supplier, is strategically curtailing its export pipeline. Cumulative shipment data through January 25, 2026—roughly four months into the current marketing year that began October 1, 2025—totaled 1.20 million metric tons (MMT), representing a 3.2% year-over-year decline from 1.24 MMT in the corresponding period a year ago. This producer-side restraint reflects rational economic decision-making, as farmers withhold supplies in response to prices they deem insufficient.

Nigeria, the world’s fifth-largest cocoa producer, is experiencing even steeper export pressures. November exports plunged 7% year-over-year to just 35,203 metric tons. Looking ahead, Nigeria’s Cocoa Association projects that the 2025/26 production cycle will contract 11% from the 2024/25 season’s estimated 344,000 MT, declining to 305,000 MT. This significant reduction is expected to provide price support as global supplies continue to tighten.

Cocoa Pod Production Outlook Brightens Harvest Prospects

A critical factor propelling Monday’s price recovery stems from optimistic cocoa pod assessments across West Africa. Chocolate maker Mondelez reported that the latest cocoa pod counts in the region stand 7% above the five-year average and “materially higher” than the previous year’s crop. Similarly, Tropical General Investments Group emphasized that favorable growing conditions in West Africa are expected to bolster the February-March cocoa harvest in Ivory Coast and Ghana, with farmers reporting notably larger and healthier cocoa pods compared to the same period in 2025.

The Ivory Coast’s primary crop is already underway, and farmers express confidence regarding the harvest quality. This abundance of healthy cocoa pods presents a mixed signal for prices—while the crop expansion provides long-term supply assurance, it may also constrain upside pricing if the harvest materializes as expected.

Demand Weakness Creates Ongoing Headwinds

Despite the supply-side resilience, demand remains stubbornly weak. Barry Callebaut AG, the world’s largest bulk chocolate manufacturer, reported a sharp 22% decline in sales volume within its cocoa division for the quarter ending November 30. The company attributed this contraction to “negative market demand and a prioritization of volume toward higher-return segments within cocoa,” signaling that elevated cocoa prices continue to deter chocolate producers and end consumers alike.

Regional grinding data reinforces this demand softness. In December, the European Cocoa Association reported that Q4 European cocoa grindings fell 8.3% year-over-year to 304,470 metric tons—a steeper decline than the anticipated 2.9% drop and the weakest Q4 reading in twelve years. The Cocoa Association of Asia reported Q4 Asian cocoa grindings contracted 4.8% year-over-year to 197,022 metric tons. North America showed marginally better resilience, with the National Confectioners Association reporting Q4 cocoa grindings rose just 0.3% year-over-year to 103,117 metric tons—essentially flat.

This global grinding weakness underscores persistent consumer price resistance and suggests that until cocoa prices moderate further, demand recovery will remain elusive.

Inventory Dynamics Shape Near-Term Price Direction

Cocoa inventories held at U.S. ports have rebounded modestly following a December low, reflecting a shift in storage patterns. ICE-monitored cocoa inventories reached a low of 1,626,105 bags on December 26 but subsequently climbed to a 2-month high of 1,752,451 bags by Thursday—a directional increase that generally exerts downward pressure on prices by signaling adequate near-term availability.

From a fundamental perspective, the International Cocoa Organization (ICCO) has substantially revised its global surplus outlook for the 2024/25 season. In November, ICCO slashed its surplus estimate to just 49,000 MT from a prior projection of 142,000 MT and simultaneously lowered global production forecasts to 4.69 MMT from 4.84 MMT. This December 19 surplus estimate represents the first surplus in four years, marking a dramatic reversal from 2023/24’s record deficit of 494,000 MT—the largest shortfall in over six decades.

Rabobank’s latest analysis further underscores constrained supplies ahead. The institution recently reduced its 2025/26 global cocoa surplus forecast to 250,000 MT from a November estimate of 328,000 MT, indicating that surpluses, while returning to positive territory, remain historically modest.

Outlook and Price Direction

Cocoa prices are caught between conflicting forces. West African producer restraint and moderating global inventories furnish underlying support, while robust cocoa pod counts and persistent demand weakness cap upside potential. The market appears to be finding an equilibrium as positive harvest signals from the cocoa pod counts collide with subdued chocolate maker activity. Until consumer demand strengthens or prices recede sufficiently to restore purchasing appetite, cocoa markets will likely consolidate around current levels, with the long-term trajectory increasingly dependent on whether the promised cocoa pod abundance translates into actual production gains.