Cocoa prices have experienced a sharp decline, reaching fresh year-to-date lows and dropping nearly 50% from their December 2024 peak. This decline marks the lowest price level since November 2024. Despite the fall in cocoa prices, retail chocolate prices have not decreased, leading to reduced consumer demand for high-priced chocolate products. The European chocolate industry is notably affected, with factories slowing production due to historically high cocoa prices, which are squeezing processors' profits in the region, the largest chocolate-consuming market. Market analysts warn of a cocoa supply deficit driven by structural imbalances and increasingly unpredictable weather conditions, contributing to volatility in the market. Recently, cocoa prices have shown some recovery from the eight-month low as traders reassess supply and demand dynamics, trimming weekly losses amid ongoing uncertainty about future demand.