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September ICE NY cocoa (CCU26) on Thursday closed down -27 (-0.51%), while September ICE London cocoa #7 (CAU26) closed unchanged.
NY cocoa prices fell on Thursday, adding to Wednesday’s -4.98% plunge to a 2-month low on continued concern about abundant supplies.
Signs of larger global cocoa supplies are negative for cocoa prices. Tuesday’s cumulative data from the Ivory Coast showed that farmers shipped 2.10 MMT of cocoa to ports in the current marketing year (October 1, 2025, through July 19, 2026), up +21% from the same period a year ago. Also, Bloomberg reported last Thursday that Nigerian June cocoa exports rose 30% y/y to 18,922 MT.
Rising cocoa inventories are bearish for prices after ICE cocoa inventories rose to a 2-year high of 3,308,066 bags on Thursday.
Cocoa prices have underlying 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. However, a senior manager at Expana said Thursday that the most recent surveys show a substantial improvement in cocoa pod counts compared with the early surveys. 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.
Cocoa demand was mixed in Q2. The European Cocoa Association reported last Thursday that Q2 European cocoa grindings fell -4.6% to 316,366 MT, a larger decline than the -1.5% y/y expected and the lowest level for Q2 in 6 years. However, the National Confectioners Association reported that Q2 North American cocoa grindings unexpectedly rose by +7.7% y/y to 109,659 MT, well above expectations of a -1% y/y decline, easing cocoa demand fears. Also, Asian cocoa demand improved after the Cocoa Association of Asia reported that Q2 Asian cocoa grindings rose by +25% y/y to 224,646 MT, well above expectations of +9% y/y.
The outlook for a smaller global cocoa surplus is supportive of cocoa prices. On Thursday, Transgraph Consulting forecast that the global cocoa surplus in 2026-2027 will shrink to 80,000 metric tons from 415,000 MT in 2025-2026, mainly due to an expected decline in production to 4.87 MMT in 2026-2027 from 5.11 MMT in 2025-2026. For its part, StoneX on April 29 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.
Cocoa prices also have underlying medium-term support from future weather concerns. On July 8, the US Climate Prediction Center said the El Niño weather pattern that emerged across the equatorial Pacific last month will likely be one of the strongest in more than 75 years. An El Niño typically brings warmer, drier conditions to West Africa, reducing soil moisture, stressing cocoa trees, and lowering yields.
The outlook for smaller cocoa supplies from Nigeria, the world’s fifth-largest cocoa producer, is supportive of 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.
