Cocoa prices fall over 10% in early 2026 on supply optimism

Cocoa prices dropped more than 10% year-on-year in the first 12 days of 2026, falling to $5,443 per ton, amid geopolitical uncertainties and favorable weather conditions boosting supply expectations.

The decline follows cocoa's sharpest annual fall on record in 2025, when prices plunged 48.1%. Drought concerns in West Africa earlier in the year had pushed prices higher, but improved harvest prospects later weighed heavily on the market, with cocoa ending 2025 at $6,056 per ton.

Global chocolate and cocoa producers had already warned of weaker sales last year, while the White House's announcement of plans to remove cocoa tariffs further increased selling pressure.

That pressure has carried into the new year, with cocoa down 10.3% in the first days of January. Favorable weather across key producing regions in West Africa has added to the decline, as harvests in Ivory Coast and Ghana are expected to rise during February and March, boosting optimism among farmers about crop quality.

Despite the anticipated increase in production, demand is expected to remain subdued. Ivorian farmers say recent unusual rainfall could lead to a significant rise in cocoa output, while European cocoa processing data are also expected to reflect weak demand conditions.

Although production forecasts continue to be revised upward, analysts say a return to previous price highs or a sustained upward trend remains unlikely in the near term.

Oran van Dort, a commodity analyst at Rabobank, told Anadolu that the sharp drop in cocoa prices on Jan. 9 was driven more by technical factors than by changes in fundamentals, adding that exporters and speculators may have started selling to take advantage of the price rise on Jan. 8.

Van Dort said that rising volatility in the cocoa market, partly caused by declining liquidity, has amplified price swings, while high margin requirements have also contributed to the steep selloff.

He said cocoa prices are expected to remain largely on a downward trend in the coming period due to surplus expectations, maintaining a long-term bearish outlook. However, he noted that given the current volatility, both a continued decline and a potential short-term rebound remain possible.