Cocoa prices fall sharply amid supply optimism

(MENAFN) Cocoa prices fall more than 10% year-on-year in the first 12 days of 2026, dropping to $5,443 per ton, as favorable weather and improved supply expectations outweigh ongoing geopolitical uncertainties, according to reports.

The decline follows cocoa’s steepest annual drop on record in 2025, when prices fell 48.1%. Earlier drought concerns in West Africa had driven prices up, but improved harvest prospects later in the year pushed them down, leaving cocoa at $6,056 per ton at the end of 2025.

Global chocolate and cocoa producers had already signaled weaker sales last year, and a White House announcement to remove cocoa tariffs added further selling pressure. This trend has continued into January, with cocoa down 10.3% in the opening days of the year.

Favorable weather across key West African producing regions, particularly in Ivory Coast and Ghana, is expected to increase harvests during February and March, boosting farmers’ expectations for crop quality. Despite the projected rise in output, demand is expected to remain weak. Ivorian farmers note that unusual rainfall could significantly increase production, while European processing data is anticipated to reflect subdued consumption.

Analysts warn that even with rising production forecasts, a return to previous price highs or a sustained upward trend appears unlikely in the near term. Oran van Dort, a commodities analyst at Rabobank, says the sharp drop in prices on January 9 was driven more by technical factors than fundamental changes, noting that exporters and speculators may have sold after price gains on January 8.

Van Dort adds that market volatility, partly caused by declining liquidity, has amplified price swings, and high margin requirements have contributed to the steep selloff.

MENAFN13012026000045017640ID1110592342