Supply pressure continues to weigh on the cocoa market

The recovery in supply pushed cocoa prices down, while increased demand continued to push corn up slightly. The polarized picture continued to dominate the world commodity market in yesterday's trading session (November 11). At the close, overwhelming buying pressure helped the MXV-Index continue to increase by nearly 0.8% to 2,375 points - the highest level since early February.

Cocoa prices continue to fall

At the end of yesterday's trading session, the industrial raw material market recorded clear differentiation between commodities. Notably, cocoa prices, after reaching a 6-week high on Tuesday last week, returned to a downward trend when the world's main production and supply region - Africa - received good news about the crop. At the end of yesterday's session, cocoa prices continued to decrease by nearly 4.5% to 5,829 USD/ton.

Chocolate maker Mondelez recently reported that cocoa production in West Africa is now 7% above the five-year average, and is “significantly ahead” of the same period last year. Harvesting is also progressing well as West Africa is currently in a dry phase, but has seen light rainfall that has kept soil moisture at moderate levels. The dry weather has not only aided the harvesting and drying of beans, but also facilitated transportation as roads are clear of mud.

In Côte d’Ivoire, cocoa arrivals remained high last week, contributing to improved supplies to the international market. A report released on November 11 showed that arrivals reached 107,000 tonnes in the week ending November 9, up nearly 19% from the previous week and above the five-year average for the same period. However, the cumulative arrivals since the beginning of the season are now only about 411,000 tonnes, 9.6% lower than the same period last year (455,000 tonnes) and still below the five-year average of 462,000 tonnes. However, this gap is gradually narrowing, reflecting positive signs of recovery in regional supply.

Meanwhile, global demand for cocoa continues to weaken, becoming a factor putting pressure on the market in the medium and long term.

On October 30, the CEO of chocolate maker Hershey said that Halloween sales this year were quite disappointing. This occasion accounts for nearly 18% of total annual candy sales in the US by 2024, second only to Christmas, so this low sales level shows a clear slowing consumption trend.

In Asia, the Regional Cocoa Association reported a 17% year-on-year decline in cocoa grinding production in the third quarter to 183,413 tonnes, the lowest for the third quarter in nine years. A similar trend was seen in Europe, where grinding volume fell 4.8% to 337,353 tonnes, a 10-year low for the same period.

In contrast, in North America, the National Confectioners Association said third-quarter grinding output rose 3.2% year-on-year to 112,784 tons. However, analysts caution that this figure may not accurately reflect reality, as more companies are reporting. Data from research firm Circana shows that in the 13 weeks ending September 7, chocolate candy sales in North America fell more than 21% year-on-year, suggesting consumer demand remains weak.

Corn prices edge up on hopes of improved consumption

According to MXV, the agricultural market recorded mixed developments among commodities, in which corn prices stood out with an increase of more than 0.5%, to 170 USD/ton, extending the increase into the second session. The main driving force for price increases came from expectations of improved global consumption demand.

Notably, the Thai government has approved a plan to sharply increase corn imports from the US and reduce import tariffs to 0%. According to spokesman Siripong Angkasakulkiat, Bangkok will import 1 million tons of corn duty-free between February and June 2026, nearly 20 times higher than the previous annual quota of 54,700 tons with a 20% tariff.

At the same time, Taiwan's MFIG Group (China) made an offer to buy 65,000 tons of corn for animal feed, with the supply possibly coming from the US, Argentina, Brazil or South Africa. This move contributed to strengthening confidence in the recovery of import demand in the short term.

On the other hand, global corn supply remains at risk. In China, the world’s second-largest producer, prolonged rains and floods in October have affected more than 364,000 hectares of crops, especially in the two key provinces of Henan and Shandong. Meteorological reports said this was the longest rainy season in 60 years, causing soil moisture to increase by more than 50% compared to the average of many years, and many corn fields were sprouted or moldy right in the fields.

In the US, analysts expect the US Department of Agriculture (USDA) to lower its corn yield estimate in its upcoming November report, reflecting poor weather conditions late in the season. However, the news that 95% of the corn acreage has been harvested suggests that actual supplies remain relatively abundant.

Meanwhile, US corn exports in the week ending November 6 only reached about 300,000 tons, a sharp decrease due to the decline in demand from Mexico, creating certain pressure on the price recovery momentum.

Overall, corn prices edged up in the latest session on improved consumption expectations and supply risks in Asia, but gains were capped by slowing US exports and the near completion of the harvest.

Price list of some other goods