Cocoa has started 2026 on a weaker footing in the global commodities market, sliding from about $5,900 per metric tonne to $5,224 as expectations of increased supply continue to weigh on prices. The decline represents a month-to-date drop of more than 12%, with cocoa hitting a seven-week low as of trading on 13 January amid signs of soft demand at the start of the year.
Market analysts say demand is likely to remain subdued, particularly in Europe, where cocoa processing data for the fourth quarter is expected to show weaker activity. While favourable weather conditions in major producing countries such as Ivory Coast and Ghana have boosted supply, analysts note that the sharp price drop recorded in early January was largely technical, driven by profit-taking after December’s rebound.
Cocoa futures had already endured a difficult 2025, falling by more than 44% over the year, from above $10,950 per metric tonne to around $6,065. Prices would have declined by more than half if not for a bullish correction in December, when cocoa rebounded from $5,456 to close the year higher. Analysts say the December decline was largely driven by traders selling into brief price strength rather than any major shift in market fundamentals.
Looking ahead, prices are expected to remain under pressure as strong harvest conditions in West Africa allow a steady flow of cocoa beans to ports. Farmers across central and west-central Ivory Coast have reported that significant volumes of cocoa will continue entering the market until late March, reducing the likelihood of any short-term supply disruption.
Cocoa’s market performance in 2025 reflected sustained bearish pressure. Prices fell sharply after the first quarter, dropping below $8,000 before staging a brief recovery in the second quarter. That rebound proved short-lived, with losses resuming in the second half of the year and accelerating into the third quarter. Although prices stabilised briefly in December, the renewed decline in mid-January 2026 has pushed cocoa firmly back into bearish territory.
The continued price drop highlights broader pressures across soft commodities, shaped by favourable weather, shifting global demand, and macroeconomic uncertainty. While lower cocoa prices may offer relief to manufacturers and chocolatiers, they pose significant risks for West African economies and smallholder farmers who depend heavily on cocoa exports for income and foreign exchange earnings.
Weak cocoa processing activity in Europe further underscores the demand challenge, with third-quarter 2025 grindings declining year-on-year, adding to concerns about oversupply. As the world’s leading producers, the Ivory Coast and Ghana remain central to the market, and any changes in weather patterns, export policies, or logistics could quickly alter global price dynamics. For now, however, cocoa prices are expected to remain under pressure.
