Cocoa Prices Extend Two-Week Decline as Rising ICE Stocks Offset West African Supply Concerns

Today Markets Analysis

Cocoa futures remain under pressure after extending their two-week decline, with New York prices reaching a fresh one-month low on Friday. December ICE New York cocoa closed down 3 points, or 0.05%, while December London cocoa #7 fell 14 points, or 0.31%.

The market continues to face competing supply signals. Rising ICE inventories and the prospect of increased Brazilian exporter selling are weighing on prices, while sharply lower Ivory Coast port arrivals and deteriorating production prospects across West Africa and other producing regions are providing underlying support.

The latest StoneX forecast has also shifted the 2026/27 global balance from a projected surplus to a deficit, reflecting the potential impact of a strong El Niño on production in Indonesia, Ivory Coast and Ecuador.

For Monday, traders will be assessing whether the market’s recent selling pressure can continue or whether declining West African arrivals and tightening production forecasts begin to attract renewed buying interest.

Market Snapshot

Current Cocoa Price Action

New York cocoa edged lower on Friday, reaching a fresh one-month low and extending the selling pressure that has dominated the market over the past two weeks.

December ICE New York cocoa settled down 3 points, or 0.05%, while December London cocoa #7 finished 14 points lower, a decline of 0.31%.

The relatively modest Friday losses do not fully reflect the broader weakness in the market. Cocoa has been under pressure from rising exchange inventories, currency-driven export concerns and uncertainty surrounding global demand.

The Brazilian real’s 8.6% weekly decline has added to selling concerns. A weaker real increases the local-currency returns Brazilian exporters can receive from dollar-denominated sales, potentially encouraging additional cocoa exports.

Brazil is a smaller producer than the major West African origins and Ecuador, accounting for approximately 4–5% of global cocoa production. Nevertheless, the currency movement is adding to the market’s wider supply concerns.

ICE Cocoa Inventories Reach a 2.5-Year High

Rising exchange inventories remain one of the clearest bearish influences on cocoa futures.

ICE cocoa stocks have increased steadily since the beginning of the year, reaching 3,694,205 bags on Friday. This represents a 2.5-year high.

The accumulation of exchange inventories suggests that more cocoa is becoming available within the certified warehouse system, easing some immediate concerns about nearby deliverable supply.

This development is particularly important because the market is also receiving evidence of weaker production and reduced arrivals from West Africa. Traders must determine whether rising exchange stocks represent a temporary movement of available cocoa into warehouses or a more sustained improvement in supply availability.

Until inventory growth begins to slow, it is likely to remain a source of pressure on futures.

Ivory Coast: Port Arrivals Fall Sharply

The latest Ivory Coast shipment data provides a significant counterweight to the bearish inventory picture.

Government figures showed that farmers delivered 44,241 tonnes of cocoa to ports during the week ended October 25, compared with 82,010 tonnes during the corresponding week last year.

For the marketing season from October 1 through October 25, cumulative port arrivals reached 122,453 tonnes, down 43% from 215,219 tonnes a year earlier.

The scale of the decline is significant for the global market because Ivory Coast remains the world’s largest cocoa producer.

The comparison requires some care, however. Ivory Coast moved the start of its 2026/27 marketing year forward by one month to September 1, while the reported Bloomberg shipment comparisons continue to use the international cocoa marketing-year period.

Even with that timing consideration, the reported figures point to a substantial reduction in arrivals and will remain an important indicator for traders assessing the availability of West African cocoa.

StoneX Revises 2026/27 Outlook to a Deficit

Cocoa received temporary support on Thursday after StoneX revised its global supply outlook.

The group now expects the 2026/27 cocoa market to record a deficit of 64,000 tonnes, reversing its previous forecast for a surplus of 25,000 tonnes.

This follows StoneX’s estimate of a substantial 494,000-tonne surplus for 2025/26.

The revised outlook reflects an expected 9.6% decline in global cocoa production during 2026/27 to 4.74 million tonnes, with lower output anticipated in Indonesia, Ivory Coast and Ecuador.

StoneX attributes the expected reduction to El Niño-related weather disruption.

The shift from a surplus forecast to a deficit is a potentially important development for the medium-term market outlook. However, the large surplus estimated for 2025/26 means that the market must also consider existing stocks and the extent to which accumulated supply can offset lower production in the following season.

El Niño: Growing Weather Risk for Cocoa Production

Weather remains one of the most important longer-term factors influencing cocoa prices.

The US Climate Prediction Center has indicated that the El Niño pattern emerging across the equatorial Pacific is likely to become one of the strongest in more than 75 years.

El Niño typically brings warmer and drier conditions to parts of West Africa. Reduced soil moisture can place cocoa trees under stress and negatively affect yields.

The potential impact extends beyond Ivory Coast and Ghana. StoneX also expects production pressure in Indonesia and Ecuador, creating the possibility of lower output across several important producing regions.

The market is particularly sensitive to weather developments because cocoa production is geographically concentrated. Disruption affecting multiple origins at the same time could tighten global availability and increase price volatility.

Ivory Coast and Ghana: Crop Development Concerns

Early assessments of the 2026/27 Ivory Coast crop indicate below-average cherelle formation, an early stage of pod development that can provide an indication of the potential harvest.

Initial crop assessments also point to poor pod development, with an average production estimate of approximately 1.8 million tonnes for the season beginning in September. This would represent an 18% decline from approximately 2.2 million tonnes in 2025/26.

Cloudy weather and limited sunshine across Ivory Coast and Ghana have also contributed to concerns about crop quality. These conditions have allowed black pod disease to spread, potentially reducing both yields and bean quality.

Ghana’s outlook is also under pressure.

The Ghana Cocoa Board estimated the 2026/27 crop at 650,000 tonnes following a field survey of pod counts, down 13% from 750,000 tonnes in 2025/26.

COCOBOD has separately projected that production could fall to between 450,000 and 550,000 tonnes, compared with its 750,000-tonne projection for 2025/26. The regulator cited swollen shoot disease, ageing cocoa farms and the potential impact of adverse El Niño weather conditions.

However, Ghana’s current-season production has been stronger. The cocoa board reported that 750,000 tonnes had been harvested for 2025/26 as of August 26, up 25.6% from 597,000 tonnes in 2024/25.

The distinction between the stronger completed season and the weaker outlook for 2026/27 will be important as the market assesses the transition in West African supply.

Global Cocoa Demand: Regional Grindings Diverge

Recent quarterly grinding figures show a mixed picture of demand across the major consuming regions.

The National Confectioners Association reported that Q3 North American cocoa grindings fell 2.5% year-on-year to 109,978 tonnes. This was weaker than expectations for no change.

In contrast, the Cocoa Association of Asia reported that Q3 Asian grindings increased by a record 29% year-on-year to 233,767 tonnes, significantly exceeding expectations for a 15% increase.

European demand was also stronger than anticipated. The European Cocoa Association reported that Q3 grindings rose 3.2% to 348,215 tonnes, compared with expectations for a 3.9% decline.

The figures suggest that demand conditions are not uniform across regions. North American processing remains a concern, while the stronger Asian and European results provide some evidence of resilience in other important markets.

The next round of grinding data will be important in determining whether the stronger performance in Asia and Europe can offset weaker North American activity.

Nigeria Exports Increase

Nigeria’s cocoa exports provide another indication of the way higher prices can influence selling behaviour.

September cocoa-bean exports increased 33% year-on-year to 19,343 tonnes.

The rise was reportedly encouraged by higher cocoa prices, which provided an incentive for exporters to sell available supplies.

Although Nigeria is not among the largest global producers, its export performance adds to the broader picture of supply availability from West Africa.

The increase also demonstrates that higher prices can encourage additional selling from producing countries, potentially limiting the extent to which supply concerns translate into sustained futures gains.

Bullish Sentiment

1. Ivory Coast arrivals fall 43%: Season-to-date port arrivals declined to 122,453 tonnes from 215,219 tonnes a year earlier, signalling significantly lower reported shipments.
2. StoneX forecasts a 2026/27 deficit: The revised outlook moves from a 25,000-tonne surplus to a 64,000-tonne deficit.
3. Global production expected to decline: StoneX forecasts a 9.6% reduction in 2026/27 production to 4.74 million tonnes.
4. Strong El Niño risk: Potential warmer and drier conditions in West Africa could reduce soil moisture and place cocoa trees under stress.
5. Weak early crop development: Below-average cherelle formation and poor pod development in Ivory Coast raise concerns about the next main harvest.
6. Ghana production outlook deteriorates: Forecasts of 450,000–550,000 tonnes from COCOBOD highlight the potential for a substantial decline.
7. European and Asian grindings improve: Q3 processing increased 3.2% in Europe and 29% in Asia, exceeding expectations in both regions.

Bearish Sentiment

1. ICE inventories reach a 2.5-year high: Exchange stocks increased to 3,694,205 bags, indicating greater availability within the certified warehouse system.
2. Brazilian real weakens sharply: The 8.6% weekly decline could encourage Brazilian exporters to increase dollar-denominated cocoa sales.
3. New York cocoa reaches a one-month low: The market continues to extend its two-week decline, reflecting persistent selling pressure.
4. Large 2025/26 surplus: StoneX estimates a 494,000-tonne surplus for the current marketing year, potentially providing stocks to offset future production losses.
5. Nigeria exports increase: September exports rose 33% year-on-year to 19,343 tonnes as higher prices encouraged selling.
6. North American grindings decline: Q3 processing fell 2.5% year-on-year, indicating weaker demand in an important consuming region.
7. Ghana’s current-season harvest remains strong: The reported 750,000 tonnes harvested in 2025/26 provides a stronger starting supply position before the expected reduction in the following season.

Monday Cocoa Market Outlook: What Traders Should Watch at the Open

Monday’s opening session comes after New York cocoa extended its two-week decline and reached a fresh one-month low. The immediate market direction will depend on whether traders continue to prioritise rising ICE inventories and currency-driven export selling or begin to focus more heavily on deteriorating West African supply conditions.

Bearish scenario for Monday: If ICE inventories remain the dominant influence and the Brazilian real continues to weaken, cocoa could remain under pressure. The prospect of additional Brazilian exporter selling, together with the reported increase in Nigerian exports, may encourage further liquidation. A failure to attract buying interest after Friday’s fresh one-month low would reinforce the short-term bearish picture.

Bullish scenario for Monday: If traders refocus on the 43% decline in Ivory Coast season-to-date arrivals and StoneX’s revised deficit forecast, cocoa could attempt to stabilise. Continued concern over El Niño, weak early crop development and Ghana’s lower production outlook may encourage buying on weakness.

The key issue is whether the market views rising ICE stocks as sufficient to offset the developing production risks. A sustained recovery will likely require evidence that lower West African arrivals are translating into tighter physical availability.

For Monday, the bias remains cautious while prices hold near recent lows, but the medium-term supply outlook makes the market vulnerable to sharp recoveries if production concerns regain control.

Price Forecast: What Traders Are Watching

Cocoa’s near-term outlook remains under pressure, although the medium-term supply picture is becoming increasingly supportive.

The immediate bearish signals are rising ICE inventories, the weaker Brazilian real and the prospect of additional exporter selling. These factors are helping to explain why futures have continued to decline despite deteriorating production forecasts.

The strongest potential support comes from West African shipment data and the growing risk of weather-related production losses. The 43% decline in Ivory Coast season-to-date arrivals is particularly important, while the early assessments of the next crop suggest that production could be significantly lower.

Demand will also remain central to the outlook. Stronger Asian and European grindings are encouraging, but the decline in North American processing shows that consumption remains uneven.

Traders will be watching:

• ICE inventory movements for evidence that stock accumulation is slowing.
• Ivory Coast port arrivals for confirmation of weaker export availability.
• Brazilian currency movements and their influence on exporter selling.
• El Niño developments and their impact on West African growing conditions.
• Crop assessments in Ivory Coast and Ghana.
• The next round of regional cocoa grinding figures.

A sustained improvement in physical supply data could help establish a price floor, while continued inventory accumulation and exporter selling may prolong the current decline.

Market Outlook for the Coming Sessions

Cocoa remains caught between a bearish short-term inventory and currency environment and a potentially tighter medium-term production outlook.

The increase in ICE inventories to a 2.5-year high is a significant obstacle to an immediate recovery. At the same time, the weakness in the Brazilian real creates an incentive for exporters to increase sales, adding further pressure to futures.

However, the decline in Ivory Coast arrivals, lower early crop estimates and revised StoneX deficit forecast suggest that the supply outlook could become increasingly supportive as the 2026/27 season develops.

The market’s next major test will be whether lower West African shipments and potential El Niño disruption begin to outweigh the availability of existing stocks.

For now, the short-term trend remains bearish, but the medium-term outlook is more balanced and carries substantial upside risk if production deteriorates further.

Currency Hedger View

Cocoa highlights the relationship between agricultural commodity prices, export incentives and foreign-exchange movements.

The weakness in the Brazilian real illustrates how currency depreciation can encourage exporters to increase dollar-denominated sales, potentially adding supply to the international market even when production conditions are deteriorating.

For cocoa traders, processors, chocolate manufacturers and international buyers, this creates exposure to both commodity-price volatility and currency movements. Changes in cocoa prices can affect procurement costs and inventory valuations, while exchange-rate fluctuations can alter the final cost of cross-border purchases.

Businesses with international cocoa supply chains should assess both exposures together when planning procurement, pricing and settlement strategies.

Explore Currency Hedger or open an account to discuss your commodity and currency exposure.

Disclaimer: This market analysis is provided for informational purposes only and does not constitute investment advice, financial advice or a recommendation to buy or sell any financial instrument or commodity. Futures and derivatives trading involves significant risk and may not be suitable for all investors. Market prices and forecasts can change without notice. Always conduct independent research and seek professional advice where appropriate.

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