Core Viewpoint - The international cocoa futures price has fallen below $3,800, marking the lowest level since October 2023, driven by weak global demand and increased supply [3][4]. Demand Side Summary - In the fourth quarter of last year, cocoa grinding in Europe was 304,470 tons, down 8.3% year-on-year, marking the sixth consecutive quarter of decline and significantly below the market expectation of a 2.9% drop [4]. - Major companies like Mondelez, Hershey, and Kraft Heinz have identified cocoa costs as a primary variable affecting profits, with Mondelez calling 2025 a "record year for cocoa cost inflation," leading to a 47% year-on-year decline in net profit [4]. - Hershey reported that cocoa costs consumed all price increase benefits, resulting in a 60.3% drop in annual net profit, while Kraft Heinz saw its operating profit margin fall from 32.5% to 14.4% [4]. Supply Side Summary - Weather conditions have raised production expectations, particularly in West Africa (notably Côte d'Ivoire and Ghana), where soil moisture is sufficient, and upcoming rainfall is expected to boost crop growth and quality [4]. - Low purchasing willingness has led to inventory buildup in major cocoa-producing countries. As of February 8, cocoa arrivals at Côte d'Ivoire ports reached 1.263 million tons, a 4.5% increase year-on-year [4]. - Ghana's cocoa prices are higher than those of other producing countries, leading international buyers to increasingly forgo purchasing Ghanaian cocoa, resulting in approximately 50,000 tons of unsold cocoa at Ghanaian ports [4]. Supply and Demand Imbalance - The imbalance between supply and demand is the main factor causing the current cocoa price crash [6]. Impact on Industry Stakeholders - The declining prices are harming industry stakeholders, with poor storage conditions affecting cocoa bean quality. Some farmers are reluctant to harvest mature cocoa pods due to concerns about not receiving payment [7]. - To alleviate pressure on stakeholders, Côte d'Ivoire has initiated a strategic operation to buy back thousands of tons of unsold cocoa that have been in warehouses and ports since November 2025 [7]. - Ghana has convened an emergency meeting to expedite payments to farmers for cocoa beans and increase domestic processing levels, with the Ghana Cocoa Board exploring new financing models to reduce reliance on raw cocoa bean exports and enhance local processing [7].

Core Viewpoint - Cocoa prices have experienced a significant decline of 45% since the beginning of the year, dropping from nearly $12,000 per ton to around $5,000 per ton, with a year-on-year decrease exceeding 50% [1] Group 1: Price Trends - Cocoa prices have fallen sharply due to optimistic harvest expectations from Côte d'Ivoire and the end of speculative activities that had previously driven prices up [1] - Despite the recent decline, current cocoa prices are still double the average price from 2012 to 2022, which was $2,525 per ton [1] Group 2: Market Dynamics - Côte d'Ivoire and Ghana together account for nearly 60% of global cocoa production, and this figure rises to 70% when including other regions in West Africa, making the cocoa industry highly susceptible to supply disruptions in this area [1] - The demand for chocolate is growing strongly, particularly in the Asian and premium markets, which are the main drivers of this demand [1] Group 3: Processing Industry - The cocoa processing industry is predominantly led by Europe, with Germany and the Netherlands controlling two-thirds of the global cocoa grinding capacity [1] - West Africa remains dominant in cocoa production, but Latin America, especially Ecuador, aims to surpass Ghana by 2027 with a target production of 650,000 tons of cocoa annually [1]