July ICE NY Cocoa (CCN26) is down -122 (-3.14%) today, and July ICE London Cocoa #7 (CAN26) is down -74 (-2.53%).
Cocoa prices are moving lower today as they settle just above Monday’s 2-week low. Today’s rally in the dollar index ($DXY) hit a 6-week high, putting pressure on most commodity prices, including cocoa.
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Signs of abundant cocoa supplies are negative for prices, as ICE cocoa stockpiles hit a 1.75-year high of 2,673,307 bags on Wednesday.
Cocoa prices fell to a 2-week low on Monday amid prospects of abundant supplies, after hitting a 3.75-month high last Monday. Last Thursday, Ivory Coast raised its cocoa delivery forecast for the 2025/26 season to 2.2 MMT from a previous estimate of 1.8-1.9 MMT, citing favorable weather.
The increased supply of cocoa from Ivory Coast is causing a bearish trend for prices. Ivory Coast’s cumulative data on Monday showed that farmers shipped 1.61 MMT of cocoa to ports in the current marketing year (from October 1, 2025 to May 17, 2026), up +1.9% from the same period a year earlier.
Last Monday, cocoa prices hit a 3.75-month high amid concerns that the formation of an El Nino weather pattern could lead to hot, dry conditions in West Africa, potentially hurting cocoa production there. The US National Oceanic and Atmospheric Administration (NOAA) estimates that there is an 82% chance that El Niño conditions will emerge between May and July and last through the end of the year, with a 67% chance of a “Super El Niño”.
Cocoa prices also received support from early surveys of the 2026/27 West African cocoa crop showing below-average cheryl formation on cocoa trees, indicating a weak outlook for the main cocoa crop starting in October.
Signs that consumer demand for chocolate is increasing is a positive factor for cocoa prices. Recent earnings results from top chocolate makers Hershey and Mondelez International were better than expected and show that consumer chocolate demand remains stable despite higher prices. However, Circana reported on April 14 that chocolate candy sales in North America in the 13 weeks ending March 22 fell 1.3% from the same period a year earlier.
The prospects of a smaller global surplus are also supportive of cocoa prices. On April 29, StoneX cut its 2026/27 global cocoa surplus forecast to 149,000 metric tons from January’s 267,000 metric tons, citing risks to the West African cocoa crop from an expected El Niño weather event. StoneX cut its 2025/26 global cocoa surplus forecast to 247,000 metric tons from a January estimate of 287,000 metric tons.
The prolonged closure of the Strait of Hormuz is disrupting global cocoa supplies and is also a contributing factor to prices. Cocoa prices are supported by reduced fertilizer supplies caused by the closure of the strait, increases in global shipping rates, insurance costs and fuel prices, increasing costs for cocoa importers.
Weak global cocoa demand is keeping prices bearish. The National Confectioners Association reported on April 23 that North American Q1 cocoa grinding fell -3.8% year-over-year to 106,087 metric tons. Additionally, the European Cocoa Association reported that Q1 European cocoa grinding fell -7.8% y/y to 325,895 MT, a larger decline than expectations of -6% y/y and the lowest for Q1 in 17 years. In contrast, the Cocoa Association of Asia reported that Q1 Asian cocoa grinding unexpectedly rose +5.2% year-on-year to 223,503 metric tons, a stronger than expected decline of -6.7% year-on-year.
Smaller cocoa supplies from Nigeria, the world’s fifth-largest cocoa producer, are supportive of prices. On Tuesday, Bloomberg reported that Nigerian cocoa exports fell -35% to 18,052 metric tons in March. The Cocoa Association of Nigeria estimates that Nigerian cocoa production in 2025/26 will decline by -11% to 305,000 metric tons from the estimated 344,000 metric tons for the 2024/25 crop year.
Recent rainfall in West Africa has been insufficient to ease drought concerns in Ivory Coast and Ghana. As of March 29, more than half of Ivory Coast and nearly two-thirds of Ghana were in drought conditions, according to the African Flood and Drought Monitor.
Last month, Ghana cut the official price paid to its cocoa farmers by about 30% for supplies for the 2025/26 growing season, and Ivory Coast also said it would cut payments to cocoa farmers by 57% for the mid-season harvest that starts this month. Ivory Coast and Ghana produce more than half of the world’s cocoa.
On the bullish side, Ivory Coast said its cocoa production in 2025/26 will decline by -10.8% to 1.65 MMT from 1.85 MMT in 2024/25. On February 10, Rabobank cut its 2025/26 global cocoa surplus forecast to 250,000 metric tons from November’s forecast of 328,000 metric tons.
As a bearish factor, the International Cocoa Organization (ICCO) on March 2 raised its global 2024/25 cocoa surplus estimate to 75,000 metric tons from 49,000 metric tons in November, the first surplus in four years. ICCO estimates global cocoa production to grow +8.4% y/y to 4.7 MMT in 2024/25.
On the date of publication, Rich Asplund did not have (directly or indirectly) any positions in any securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy here for more information.
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