Cocoa prices rebound, but the fundamentals remain weak.

Cocoa futures in New York rose 0.83% today, while London fell 2.06%, rebounding from a 1.75-year low. The rebound is due to a decline in cocoa deliveries from Ivory Coast ports—61,890 tons were delivered between October 1 and November 23, a year-on-year decrease of 3.7%.

But this rebound may be a short covering, with significant fundamental pressure:

**Supply Surplus Expectations**
- The International Cocoa Organization forecasts a global cocoa production of 4.84 million tons for the 2024/25 season, a year-on-year increase of 7.8%, marking the first surplus in four years.
- The weather in Ivory Coast and Ghana is good, with the condition of cocoa trees in the main producing areas above the five-year average by 7%.
- Nigeria's production may decline by 11% to 305,000 tons

**Weak Demand**
- Asia's Q3 cocoa powder production reached 1.83 million tons, a year-on-year decrease of 17%, marking a 9-year low.
- Europe Q3 declined by 4.8%, hitting a 10-year low
- Chocolate sales in the U.S. fell by more than 21% (data from the National Confectioners Association)

**Policy risk dissipates**
- The EU Deforestation Regulation (EUDR) has been postponed for one year, alleviating supply concerns.
- The Trump administration has lifted the 10% retaliatory tariffs on non-American products such as cocoa.

Conclusion: Short-term Rebound cannot conceal the long-term surplus situation, beware of subsequent pressure.