Cocoa market faces price volatility amid rising inventories

Cocoa futures have experienced a significant price decline as ICE-certified inventories reached their highest level in two and a half years. This increase in physical reserves has dampened immediate speculation regarding supply shortages, despite ongoing weather concerns in West African production hubs like Ivory Coast and Ghana.

While cocoa prices have seen extreme volatility—peaking near $6,500 per ton in late August before dropping sharply—the chocolate industry is showing signs of a demand recovery. Analysts report a projected 14% increase in global cocoa grinding for the third quarter of 2026, with particularly strong growth in Asia.

Major manufacturers, including Nestlé, Mars, Mondelēz, and Ferrero, have faced challenges due to previous price hikes of 25% to 50% driven by high raw material costs. Some companies, such as Lindt, have lowered revenue outlooks as consumers shift toward cheaper brands or reduce seasonal purchases. In response to shifting demand, some producers are planning price reductions for holiday offerings.