News and Articles

• London cocoa futures fell 5 percent to £4,145 per tonne.
• New York cocoa futures declined 4.8 percent to $5,603 per tonne.
• European cocoa grinding fell 4.6 percent from a year earlier.
• European processing reached its lowest second-quarter level since 2020.
• Lower cocoa prices reduced input-cost pressure for dark chocolate producers.

Cocoa futures fell sharply after European processing data showed weaker demand from chocolate manufacturers. London cocoa dropped 5 percent to £4,145 per tonne, and New York cocoa declined 4.8 percent to $5,603 per tonne. The decline reduced near-term raw-material cost pressure for dark chocolate producers after a period of strong price swings.

European cocoa grinding reached 316,366 tonnes during the second quarter, down 4.6 percent from the same period a year earlier. The total was the lowest second-quarter figure since 2020. Grinding volumes measure the quantity of cocoa beans processed into cocoa liquor, butter and powder, making them a useful indicator of demand from chocolate and food manufacturers.

The weaker European figures showed continued pressure on chocolate consumption after manufacturers raised retail prices to recover earlier cocoa cost increases. Dark chocolate contains more cocoa than many milk chocolate products, so lower bean, cocoa liquor and cocoa butter prices can have a larger effect on its production cost.

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The price benefit may take time to reach finished dark chocolate contracts. Manufacturers often buy cocoa months in advance and may still hold inventory purchased at higher prices. Processing charges, exchange rates, sugar costs, packaging and freight can also limit reductions in delivered prices.

Cocoa futures had risen by about 20 percent during the previous week before losing nearly 8 percent as traders reduced positions and demand concerns returned. The sharp changes show why buyers should avoid basing negotiations on a single trading session.

Asian cocoa grinding rose 25.07 percent from a year earlier, moving against the European trend. Buyers sourcing cocoa ingredients or finished dark chocolate from several regions may receive different offers based on local processing demand, inventory levels and supplier purchasing positions.

Dark chocolate buyers can use the futures decline to request updated quotations for cocoa liquor, cocoa butter, couverture and finished products. Supplier offers should identify the cocoa benchmark, purchasing period, exchange rate and processing premium used in the calculation.