Cocoa Futures Ease as Supply Concerns Offset Crop Risks

Cocoa futures finished slightly lower on Friday, with December ICE New York cocoa settling down 1 point at 4,xxx and December ICE London cocoa falling 14 points, or 0.32%. Prices eased after gaining momentum earlier in the week, as improving supply prospects continued to offset concerns surrounding the outlook for the 2026/27 West African crop.

Ghana provided some support midweek after the country’s cocoa regulator proposed increasing farmer payments by 6% for the 2026/27 season. Higher producer prices could encourage farmers to hold back beans in anticipation of better returns, potentially tightening near-term availability.

However, global supply remains a bearish influence. Barry Callebaut, the world’s largest cocoa processor, said the global cocoa market is currently well supplied and better positioned to manage weather-related risks than during the 2023/24 El Niño season, when cocoa prices surged to record highs.

Ivory Coast production and arrivals continue to weigh on the market. Cumulative cocoa arrivals at Ivory Coast ports reached 2.14 million metric tons for the October 1, 2025 through August 30, 2026 marketing year, up 19% from the same period last year. The country’s cocoa regulator also reported that production reached 2.06 million metric tons between June 2025 and June 2026, up 30% from 1.58 million tons a year earlier.

ICE cocoa inventories remain elevated. Stocks reached a two-year high of 3,436,742 bags last Friday before edging lower to 3,415,952 bags by Friday.

Despite the recent pullback, cocoa retains underlying support from concerns over West African crop quality. Cloudy conditions and limited sunshine across Ivory Coast and Ghana have increased the risk of black pod disease, potentially reducing bean quality.

Ghana’s crop outlook remains particularly concerning. The Cocoa Board estimated on August 20 that the 2026/27 crop could reach approximately 650,000 MT, down 13% from 750,000 MT last season. COCOBOD later projected a potentially much lower range of 450,000 to 550,000 MT, citing swollen shoot disease, aging farms and potential El Niño-related weather risks.

The Ivory Coast outlook is also being closely monitored. Early assessments for the 2026/27 main crop indicate below-average cherelle formation and poor pod development. Initial estimates point to production of around 1.8 million MT, approximately 18% below the estimated 2.2 million MT produced in 2025/26.

Global balance estimates have also become more supportive. StoneX recently reduced its 2026/27 global cocoa surplus forecast to 25,000 MT from 149,000 MT, citing potential El Niño risks to West African production. Transgraph Consulting expects the global surplus to decline to 80,000 MT in 2026/27 from 415,000 MT in 2025/26, largely due to an expected reduction in global production.

Weather remains a key medium-term driver. The US Climate Prediction Center has warned that the developing El Niño pattern could become one of the strongest in more than 75 years. El Niño conditions can bring warmer and drier weather to West Africa, reducing soil moisture and placing additional stress on cocoa trees.

Demand signals remain mixed. European cocoa grindings fell 4.6% year-over-year in Q2 to 316,366 MT, marking the weakest second-quarter result in six years. North American grindings, however, increased 7.7% to 109,659 MT, while Asian grindings surged 25% to 224,646 MT, providing some evidence of improving demand outside Europe.

Today Markets Analyst Louis Roche said the cocoa market remains caught between strong current supply and increasingly uncertain forward production prospects. “The near-term fundamentals remain relatively well supplied, but the market is increasingly focused on what the 2026/27 crop will deliver. West African weather, disease and early pod development will remain critical price drivers as the new season develops.”

Cocoa Futures

December 2026 ICE New York Cocoa: down 1 point, or 0.02%

December 2026 ICE London Cocoa: down 14 points, or 0.32%

Analysis by Louis Roche, Analyst, Today Markets.

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