Daily Cocoa Market Report (4 Feb 2026): Cocoa Markets Reprice Risk: Speculative Liquidation, Quality Constraints, and Regional Tightness Diverge

Cocoa futures reversed sharply lower on Feb 4, decisively erasing the prior session’s rebound and confirming a failed upside continuation. ICE US Mar-26 settled at 4,041 (-224 pts, -5.25%), with losses of similar magnitude extending across the curve, while ICE London Mar-26 closed at 2,977 (-102 pts, -3.31%), again underperforming on the downside but holding up better than New York. The uniform declines across maturities point to broad speculative liquidation rather than contract-specific pressure, with New York absorbing the bulk of the selloff. Despite the sharp move, the absence of curve inversion or disorderly spreads indicates that the decline was positioning-driven, not triggered by a sudden deterioration in physical supply fundamentals.

Industry & Demand Developments

Mondelez International warned that 2026 demand growth will be muted as sustained cocoa price inflation continues to push cost-conscious consumers away from discretionary chocolate purchases. The company cited tightening household budgets, particularly in the US, and fragile consumer confidence in Europe, where last year’s price increases are still working through demand. Mondelez expects organic net revenue growth of just 1–2% in 2026, with profit growth capped despite further pricing actions, underscoring the limits of pass-through in a high-price cocoa environment. Importantly for cocoa markets, the company noted that chocolate volumes are expected to stabilise rather than recover, reinforcing the view that elevated prices are beginning to constrain end-market demand, even as supply-side tightness continues to dominate futures pricing dynamics.

Supply & Origin Developments

Ivory Coast’s cocoa regulator has moved to double weekly cocoa purchases to 20,000 tonnes, citing growing concerns over the deteriorating quality of on-farm and inland stocks. The Coffee and Cocoa Council (CCC) is accelerating purchases to prevent further value loss, as beans stored in non-breathable nylon bags are degrading more rapidly than those kept in traditional jute sacks. While the regulator is unlikely to face difficulties sourcing beans from farmers—who are under pressure from buyers offering prices below the guaranteed minimum—it may struggle to resell this cocoa to exporters, with several industry participants expressing reservations about quality and warning that discounts may be required. The move underscores a widening gap between nominal supply availability and deliverable-quality cocoa, reinforcing concerns that headline stock figures may be overstating usable supply, particularly for export and certified markets.

Ivory Coast Regulator Steps Up Cocoa Buying as Bean Quality Declines

Ivory Coast’s cocoa regulator has sharply increased its weekly cocoa purchases after growing concerns over the condition of beans held by farmers and traders, according to industry sources. The Coffee and Cocoa Council (CCC) has raised its weekly buying target to 20,000 tonnes, starting this week, in an

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Crop Outlook & Balance Sheet Developments

TRS crop surveys indicate a recovery in canopy health across both Côte d’Ivoire and Ghana, easing some near-term agronomic concerns after last season’s stress. Reflecting this improvement, TRS has raised its 2025/26 global cocoa surplus forecast by 41,000 tonnes to 111,000 tonnes, and increased its 2026/27 surplus estimate by 57,000 tonnes to 251,000 tonnes. While these revisions point to a potential medium-term easing in the global balance, the outlook remains highly sensitive to bean quality, certification rates, and the pace at which improved tree health translates into exportable, deliverable cocoa, factors that continue to limit the immediate bearish impact of higher surplus projections on futures pricing.

Futures Performance

ICE US Cocoa Futures (CC)

US cocoa futures reversed sharply lower, fully retracing the prior session’s rebound. Losses were uniform across the curve, averaging ~4.5–5.3%, which confirms systematic liquidation rather than isolated front-month pressure. The absence of curve distortion indicates this was not delivery-driven and instead reflects broad risk reduction, likely tied to speculative length unwinds following a failed upside continuation.

ICE London Cocoa Futures (C)

London cocoa also sold off decisively, though losses were less severe than New York, preserving relative strength. Declines remained well-distributed across maturities, reinforcing that this was macro-positioning driven rather than a front-month technical event. London’s smaller percentage drawdown suggests residual structural support, consistent with tighter physical market perception versus ICE US.

Contango/Backwardation

The cocoa term structure following the Feb-4 selloff remains structurally calm and does not confirm physical stress. ICE US cocoa is in clean, uninterrupted contango across the entire curve, with steady premiums from Mar-26 through Dec-26, signaling adequate nearby availability and a market that is pricing carry and medium-term risk rather than scarcity. London shows a near-flat Mar–May spread with only marginal backwardation, indicating slightly tighter nearby conditions relative to New York, but the curve quickly reverts to contango further out, confirming that any tightness is localized and not propagating forward. Crucially, the sharp price decline occurred without curve inversion, which strongly suggests the move was driven by speculative liquidation and risk reduction rather than a deterioration in physical supply. As long as front-month backwardation does not deepen or extend, the structure points to a volatile consolidation phase rather than a transition into a genuine supply-stress regime.

US–UK Spread

4,041 − (2,977 x 1.365$/£) =$-22 ton (down from $50/ton)

The US–UK cocoa spread has undergone a clear structural inversion, culminating on Feb-4 with London cocoa becoming more expensive than New York in USD terms. Throughout mid-January, the spread remained firmly positive, with US prices trading at a substantial premium of roughly +100 to +200 USD/ton, reflecting heavier speculative length and liquidity concentration in ICE US. This premium steadily compressed as New York prices corrected more aggressively, while London proved comparatively resilient. By Feb-4, the spread flipped to -22, confirming that UK cocoa now trades above US in USD terms. This inversion is significant: it signals relative tightness in the European physical market, likely driven by origin flow constraints, certification dynamics, and grinder coverage needs, while US prices absorbed the bulk of speculative liquidation. The fact that this flip occurred without London backwardation deepening sharply suggests the move is not panic-driven but reflects a re-pricing of regional supply risk, with Europe now carrying the higher marginal value for nearby cocoa.

Volume & Open Interest Analysis

ICE US Cocoa (CC)

ICE London Cocoa (C)

The selloff into Feb-4 was accompanied by elevated volume in both New York and London, confirming that the move was active and contested, not a low-liquidity air pocket. In ICE US cocoa, volume expanded sharply on Feb-4 while prices fell aggressively, a classic signature of forced liquidation and stop-driven exits. Open interest data for Feb-4 is not yet published, but the prior two sessions already showed OI rising into the rally, implying that fresh speculative length had entered just before being flushed.

In contrast, London cocoa shows a structurally different profile. While daily volume eased on Feb-4, open interest has been rising persistently and steadily throughout the entire period, reaching new highs into Feb-3. This divergence is critical: London did not experience the same degree of participation collapse, suggesting that holders there are less leveraged and more structurally committed, consistent with commercial and physical-linked positioning. The combination of London OI accumulation + NY liquidation directly explains why the US–UK spread inverted and why London cocoa now trades at a premium in USD terms.

Certified Cocoa Inventory Stocks

ICE US certified stocks continued to climb on Feb-4, extending a clear upward trend that has been in place throughout January. The steady accumulation of US inventories reflects ongoing certification inflows and delivery activity, reinforcing the absence of nearby physical stress in the New York market and aligning with the persistent contango structure observed in CC futures.

In contrast, ICE UK inventories have stagnated and effectively declined on a net basis over the past month, with repeated drawdowns and only intermittent stabilization. While the Feb-4 figure was unchanged on the day, the broader January trend points to tightness in European-certified stocks, likely driven by stronger grinder demand, certification bottlenecks, and reduced availability of deliverable-grade beans into ICE Europe warehouses.

What to Expect Tomorrow

Technically, cocoa remains firmly in a bearish continuation phase, but the market is entering a short-term exhaustion zone that raises the probability of stabilisation or a corrective bounce, rather than an immediate further acceleration lower.

Across intraday (5-min, 1-hour) timeframes, price is holding just above the 4,040–4,050 support band, which has already absorbed multiple tests. Momentum indicators are stretched: RSI is hovering in the low-30s, stochastic oscillators are pinned near oversold, and downside momentum on MACD is decelerating, not expanding. This argues that selling pressure is losing urgency, even if trend direction remains negative.

On the daily chart, price is decisively below the 20-, 50-, and 100-day moving averages, confirming that the primary trend is still down. However, the daily RSI is approaching oversold territory, while volume has expanded into the decline, a classic setup for short-covering or mean-reversion attempts, not trend reversal. The absence of capitulation-type volume suggests the market is more likely to pause than collapse.

The weekly structure reinforces this view: cocoa is deeply oversold relative to longer-term momentum measures, but there is no bullish divergence yet. That means upside attempts are likely to be corrective and fragile, not the start of a sustained rally unless price can reclaim and hold above 4,120–4,150.

If you notice any discrepancies in these figures or have extra information, please email hello@cocoaintel.com or leave a comment – corrections and additional insights are always welcome.