Cocoa Prices Fall Below $4,700 per Ton Amid Weak European Demand

London | EcoPulse24

Cocoa prices came under sharp pressure at the start of the week, as markets focused on signs of slowing global demand alongside a relative improvement in supply prospects from West Africa. This shift has led to a market repricing after a period of sharp gains.

Cocoa futures fell below $4,700 per ton, hitting their lowest level since January 2024, amid rising concerns over consumption - especially in Europe, the world's largest cocoa market and a key indicator of global demand trends.

Recent data showed European cocoa grindings dropped 8.3% year-on-year in Q4, totaling 304,470 tons. This marked the sixth consecutive quarterly decline and was much steeper than market expectations of a 2.9% drop, reinforcing a negative outlook for European demand.

In contrast, Asia recorded a milder decline, with grindings down 4.8% to 197,022 metric tons, compared with forecasts of a deeper 12% drop. North America showed some stability, with grindings rising slightly by 0.3% to 103,117 tons.

On the supply side, the outlook for the 2025/2026 crop in West Africa improved, supported by shipment data from Côte d'Ivoire ports, which reached 37,000 tons between January 12 and 18, compared to 34,000 tons in the same period last season. Local farmers also reported satisfactory rainfall and soil moisture last week, supporting the development of the mid-crop season from April to September.

EcoPulse24 Analysis:
The cocoa price drop reflects an imbalance between demand and supply, with weak European consumption as the most significant factor influencing market pricing, despite cautiously positive signals from West African production. The continued decline in European grindings limits potential price support, even as North American demand stabilizes and Asia shows relative improvement. If mid-crop yields remain strong, prices may stay under pressure in the near term unless there is a clear recovery in global consumption indicators.