Why Cocoa Just Got Cheap Overnight

Cocoa prices tanked this week: NYC futures down 0.62%, London down 1.47%. The culprit? Trump just cut tariffs on non-US grown commodities by 10%—and cocoa got caught in the crossfire.

Here’s the plot twist though: Brazil cocoa still faces a brutal 40% national security tariff, so the relief is only partial.

The real pressure comes from supply. Ivory Coast (world’s #1 producer) shipped 516,787 MT last month—down 5.7% YoY, which should be bullish. But here’s the problem: West Africa is looking at a bumper crop. Mondelez flagged cocoa pod counts are 7% above the 5-year average. Ghana and Ivory Coast farmers are reporting ideal conditions. The main harvest just kicked off, and optimism is through the roof.

Demand? Dead in the water. Hershey’s Halloween chocolate sales flopped. Asian cocoa grindings collapsed 17% YoY (lowest Q3 in 9 years). European grindings hit a 10-year Q3 low. North American chocolate sales dropped over 21% in the past quarter.

One saving grace: ICE cocoa stocks hit a 7.75-month low at 1.76M bags. Nigeria’s expected to cut production 11% next year. But it’s not enough to offset the supply deluge coming.

Bottom line: Tariff relief + bumper crop + weak demand = downward pressure staying sticky.