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September ICE NY cocoa (CCU26) on Thursday closed down -56 (-1.10%), and September ICE London cocoa #7 (CAU26) closed down -71 (-1.86%).
Cocoa prices settled lower on Thursday amid some pre-weekend liquidation and position squaring, as US markets will be closed on Friday for a holiday. Losses in London cocoa accelerated on Thursday after the British pound (^GBPUSD) rose to a 2-week high. The stronger pound undercuts cocoa priced in sterling.
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Rising cocoa inventories are also weighing on prices. ICE cocoa inventories rose to a 1.75-year high of 3,017,796 bags on Wednesday.
Cocoa prices have rallied sharply over the past two weeks, rising by more than 20% and hitting 5.5-month highs last Thursday. Concerns about the upcoming West African cocoa crop pushed prices sharply higher. Heavy rains in the Ivory Coast and Ghana have flooded roads and cut off farmers’ access to farms and ports, threatening global supplies. Accumulated June rainfall through last Monday has already reached levels near the typical average for the entire month in both countries. Excessive moisture also increases the risk of brown rot disease and black pod disease on cocoa trees, reducing yields and jeopardizing the harvest.
Cocoa prices also have underlying medium-term support from future weather concerns. On June 10, Japan’s Meteorological Agency confirmed an El Niño weather pattern had formed across the equatorial Pacific. An El Niño typically brings warmer, drier conditions to West Africa, reducing soil moisture, stressing cocoa trees, and lowering yields. The US National Oceanic and Atmospheric Administration (NOAA) estimates a 67% chance of a “Super El Niño” this year, one of the strongest ever recorded.
Cocoa prices also have support from early surveys of the 2026/27 Ivory Coast cocoa crop, which show below-average cherelle formation on cocoa trees, signaling a weak outlook for the main cocoa harvest, which begins in September. Early crop assessments show poor pod development and an average estimate of 1.8 MMT for the season starting in September, down -18% from about 2.2 MMT in 2025/26. The markets are awaiting new surveys in July to determine the final size of the cocoa crop.
Cocoa prices were under recent pressure amid signs of abundant supply. On June 11, the Ivory Coast boosted its estimate of cocoa that has reached its ports by more than 260,000 MT so far this season. Cumulative data from the Ivory Coast now show that farmers shipped 2.04 MMT of cocoa to ports in the current marketing year (October 1, 2025, through June 28, 2026), up +20% from the same period a year ago. The Ivory Coast recently said its cocoa production in 2025/26 would fall -10.8% y/y to 1.65 MMT from 1.85 MMT in 2024/25.
Signs of larger global cocoa supplies are negative for cocoa prices. Bloomberg reported last Friday that Nigerian cocoa exports in May rose +28% y/y to 18,034 MT.
Weak global cocoa demand is bearish for prices. The National Confectioners Association reported April 23 that North American Q1 cocoa grindings fell -3.8% y/y to 106,087 MT. Also, the European Cocoa Association reported that Q1 European cocoa grindings fell -7.8% y/y to 325,895 MT, a bigger decline than expectations of -6% y/y and the lowest for a Q1 in 17 years. Conversely, the Cocoa Association of Asia reported that Q1 Asian cocoa grindings unexpectedly rose +5.2% y/y to 223,503 MT, stronger than expectations of a decline of -6.7% y/y.
Smaller cocoa supplies from Nigeria, the world’s fifth-largest cocoa producer, are supportive for prices. Nigeria’s Cocoa Association projects that Nigerian cocoa production in 2025/26 will fall by -11% y/y to 305,000 MT, from a projected 344,000 MT for the 2024/25 crop year.
In February, Ghana cut the official price it pays its cocoa farmers by nearly 30% for supplies for the 2025/26 growing season. In March, the Ivory Coast also said it would cut cocoa farmers’ pay by 57%, effective for the mid-crop harvest that began in March. The Ivory Coast and Ghana produce more than half of the world’s cocoa.
The outlook for a smaller global cocoa surplus is supportive of cocoa prices. On April 29, StoneX cut its 2026/27 global cocoa surplus estimate to 149,000 MT from a January forecast of 267,000 MT, citing risks to the West African cocoa crop from an expected El Niño weather event. StoneX also cut its 2025/26 global cocoa surplus forecast to 247,000 MT from a January estimate of 287,000 MT.
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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