ICE NY COCO (CCK26) is up +24 (+0.72%) today, and ICE LONDON COCO #7 (CAK26) is up +14 (+0.56%) today.
Cocoa prices are moving higher today on concerns that a prolonged US-Iran war will keep the Strait of Hormuz closed and disrupt global cocoa supplies. 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. Today’s rally in the Dollar Index ($DXY) from 1.5-week highs is limiting gains in cocoa prices.
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Funds’ excessive short positions in New York cocoa could add fuel to any short-covering rally. Last Friday’s Weekly Commitment of Traders (COT) report showed that funds increased their short positions in NY Cocoa by 1,737 net short positions to 18,105 in the week ended April 14, the highest in more than 3 years.
Smaller cocoa supplies from Nigeria, the world’s fifth-largest cocoa producer, are supportive of prices. Nigerian February cocoa exports fell -4.6% to 40,110 metric tons, Bloomberg reported on Wednesday. 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.
Abundant existing cocoa supplies are bearish for prices as ICE cocoa stockpiles hit a 20-month high of 2,632,357 bags on Monday.
Weakness in global cocoa demand is also a bearish factor on prices. The National Confectioners Association reported last Thursday 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.
Weak chocolate demand signals are negative for cocoa prices. Circana reported last Tuesday that chocolate candy sales in North America in the 13 weeks ending March 22 fell -1.3% from the same period a year earlier. Additionally, Bloomberg Intelligence said sales of chocolate candy during the last Easter holiday, a key seasonal time for chocolate consumption, fell nearly 5% compared to last year.
Cocoa supplies from Ivory Coast are abundant, which is a bearish factor for prices. Ivory Coast’s cumulative data on Monday showed farmers shipped 1.48 mmt of cocoa to ports in the current marketing year (from October 1, 2025 to April 19, 2026), unchanged from the same period a year earlier. Coco’s gains are being limited after the dollar index hit a 1.5-week high today.
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. Looking ahead, StoneX on January 29 predicted a global cocoa surplus of 287,000 metric tons in the 2025/26 season and a surplus of 267,000 metric tons for 2026/27.
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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