Cocoa prices are in a meltdown, hitting a four-year low due to an abundant supply and weakening demand as growing health consciousness grips consumers. Benchmark cocoa futures on the Intercontinental Exchange in New York hit $2,052 per metric ton on February 3, the lowest level since March 2013, in an extended year-long decline after 2015's weather-related rally. They closed at $2,052 per ton on Friday.

A man choosing chocolates in Shanghai, China. Zhang Peng | LightRocket | Getty Images

A bumper crop last season from benign weather in West Africa is weighing down prices. Ivory Coast and Ghana are the world's top producers of cocoa beans, accounting for more than two-thirds of global supply. "The Harmattan season—marked by dry and dusty winds blowing from the Sahara—has been weak this season, and has so far not created much damage to cocoa crops," said Singapore-based Phillip Futures soft commodities dealer, Wilfred Chong. "Instead, weather conditions are seen to be improving, fuelling the selloff." ICE cocoa may fall further, Chong said, pegging support at $2,000 a ton. In the largest cocoa producing country of Ivory Coast, beans are piling up at warehouses and ports as exporters who put in bids for the commodity at high prices are now stuck with stock they're unwilling to sell at a loss, Reuters reported in January.

Demand fundamentals are also poor as weight-conscious consumers are cutting down on snacking. In the U.S., which is the world largest chocolate market, retail sales of chocolate candy have seen little growth in the last two years. Sales by volume increased by just 0.6 percent in 2016 while sales by value were up 0.7 percent to $13.7 billion in the year up to December 25, according to data from Chicago-based market research firm IRI. In 2015, volume sales fell 2.8 percent while dollar sales were up 3 percent to $13.6 billion, said IRI. Annual cocoa production is about 4 million tons and many traders are expecting a supply surplus this year. The ICCO will release its projections for the current cocoa year later this month. In China, retail volumes of chocolate likely fell 4 percent to 122,000 tons in 2016. Market research firm Euromonitor attributed this decline to a growing awareness about health, a slowdown in discretionary spending, and only marginal product innovation.

"New product development in chocolate was limited in 2016 compared to other snack foods, such as nuts, as many leading confectionery manufacturers have cut their budgets for product innovation. This lead to a slowdown in demand, as consumers are typically drawn to novel line extensions," wrote Euromonitor analysts. Survey results released in late-January from the inter-government International Cocoa Organization showed almost unchanged global stock level as of September 30—a signal that there was little drawdown—spooking the market, which had been expecting a production deficit in the 2015-2016 marketing year.