Cocoa prices are experiencing a significant downturn due to decreased demand, particularly in Asia. The podcast uncovers the implications of disappointing grind data on agricultural markets and how tariffs on Brazilian imports are affecting the situation. Experts analyze price fluctuations, forecast potential supply and demand improvements, and discuss the influence of weather and inventory levels on future market dynamics. Despite the current challenges, a stabilization in cocoa prices might be on the horizon.
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insights INSIGHT
Cocoa Demand Collapse Confirmed
Cocoa prices collapsed about 12% recently due to confirming demand destruction in 2Q25 grind data.
The demand fall varied regionally, with Asia down 16%, Europe 7%, and North America about 3%.
insights INSIGHT
Price Hikes Drive Demand Destruction
The 16% drop in Asia's cocoa grind at 2Q25 is huge but reflects a 120% cocoa price increase.
Price hikes contributed to significant demand destruction as the industry adjusted to cost pressures.
volunteer_activism ADVICE
Price Drop Eases Industry Margins
Falling cocoa prices now provide needed margin relief to the confectionery industry.
Reduced prices help companies cope with limited ability to pass costs to retailers.
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After historic price gains across the cocoa market through 2024, cocoa markets are leading the losses across agri markets through 2025 YTD. The hangover from last year’s 4Q highs in cocoa prices has come to roost, and the long-awaited 2Q25 cocoa grind data has confirmed the demand destruction widely reported by the industry over recent months. However, regional disparities have become more notable. The sharp decline in cocoa prices through July falls in line with our view, amid expectations of demand-side destruction. However, we continue to caution that cocoa prices will remain structurally higher for longer.
Speaker
Tracey Allen, Head of Agricultural Commodities Research
At Any Rate