New York cocoa futures dropped sharply on Tuesday, April 8, falling 6.4 percent to settle at US$3,138 per tonne, a one-month low, as rising Ivory Coast shipments collided with mounting evidence of weak chocolate demand ahead of Easter.
May Intercontinental Exchange (ICE) New York cocoa contracts closed down 207 points or 6.40 percent, while May ICE London cocoa fell 128 points or 5.21 percent, posting a one-and-a-half-week low.
Supply Pressure Builds
Cumulative cocoa arrivals from Ivory Coast to ports in the current marketing year, which runs from October 1, 2025 through April 4, 2026, reached 1.45 million metric tonnes, edging 0.7 percent above the 1.44 million metric tonnes recorded in the same period a year ago. That year-on-year supply increase added to a market already struggling with ample inventories.
ICE-certified cocoa warehouse stocks rose to 2,417,397 bags on Monday, a 19-month high, reflecting continued accumulation as buyers show little urgency to absorb available supply.
Demand Remains the Core Problem
The timing of Tuesday’s selloff is particularly pointed for the cocoa industry. Chocolate candy sales for the Easter holiday, historically one of the strongest seasonal demand windows of the year, are tracking approximately 5 percent below last year’s figures, according to Bloomberg Intelligence estimates.
That weak seasonal signal follows a string of poor demand readings from major processors. Barry Callebaut (AG), the world’s largest bulk chocolate maker, reported a 22 percent decline in cocoa division sales volume for the quarter ending November 2025. The European Cocoa Association reported that fourth-quarter European cocoa grindings fell 8.3 percent year-on-year to 304,470 metric tonnes, the weakest fourth-quarter performance in 12 years. Asian grindings also declined 4.8 percent in the same period.
Drought Risk Lingers
Despite the bearish mood, supply risks have not disappeared entirely. Drought conditions across key West African growing areas remain a concern, with the African Flood and Drought Monitor showing as of March 29 that parched conditions covered more than half of Ivory Coast and roughly two-thirds of Ghana.
Those weather concerns had briefly lifted New York cocoa to a two-and-a-half-week high last Wednesday before broader market sentiment reasserted itself.
Fund Positioning Raises Short-Covering Risk
The weekly Commitment of Traders (COT) report released last Friday showed money managers added 3,481 contracts to their net short position in London cocoa in the week ended March 31, pushing the aggregate short to 33,827 contracts, the most bearish fund positioning recorded in over eight years. An extreme short position of this scale historically raises the risk of a sharp short-covering rally if unexpected supply disruptions materialize.
Farmer Pay Cuts Deepen
The price collapse is landing hardest on cocoa farmers. Ghana cut its official farmgate cocoa price by nearly 30 percent earlier this year, and Ivory Coast announced a 57 percent reduction in farmer pay effective for the mid-crop harvest that started this month. Together, the two countries produce more than half of the global cocoa supply.
First-quarter grind data due on April 16 will be closely watched. Trade expectations point to year-on-year declines of around 2 to 4 percent in Europe and steeper falls in North America, and a worse-than-expected reading could add further pressure to an already battered market.
