July ICE NY cocoa (CCN26) on Friday closed up +69 (+1.86%), and July ICE London cocoa #7 (CAN26) closed up +7 (+0.24%).
Cocoa prices saw some pre-weekend short-covering after NY coffee fell to a 3-week low on Thursday, and London coffee edged to a 3-week low on Friday before rebounding higher.
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Cocoa prices showed weakness earlier this week amid signs of abundant supply. The Ivory Coast on Thursday boosted its estimate of cocoa that has reached its ports by more than 260,000 MT so far this season. Cumulative data from the Ivory Coast now show that farmers shipped 1.95 MMT of cocoa to ports in the current marketing year (October 1, 2025, through June 7, 2026), up +18.9% from the same period a year ago. The Ivory Coast recently said its cocoa production in 2025/26 would fall -10.8% y/y to 1.65 MMT from 1.85 MMT in 2024/25.
Rising cocoa inventories are also bearish for prices. ICE cocoa inventories rose to a 1.75-year high of 2,929,074 bags last Friday and were just slightly below that level at 2,917,793 bags on Friday.
Cocoa prices have underlying medium-term support from weather concerns. Japan’s Meteorological Agency on Wednesday confirmed an El Niño weather pattern had formed across the equatorial Pacific. The formation of an El Niño weather pattern could lead to warmer, drier conditions in West Africa, potentially damaging cocoa production there. The US National Oceanic and Atmospheric Administration (NOAA) estimates a 67% chance of a “Super El Niño” this year, one of the strongest ever recorded.
Cocoa prices also have support from early surveys of the 2026/27 West African cocoa crop, which show below-average cherelle formation on cocoa trees, signaling a weak outlook for the main cocoa harvest, which begins in October.
The prolonged closure of the Strait of Hormuz is disrupting global cocoa supplies and also supporting prices. The closure of the strait supports cocoa prices by reducing fertilizer supplies, boosting global shipping rates, insurance costs, and fuel prices, thereby raising cocoa importers’ costs.
Weak global cocoa demand is bearish for prices. The National Confectioners Association reported April 23 that North American Q1 cocoa grindings fell -3.8% y/y to 106,087 MT. Also, the European Cocoa Association reported that Q1 European cocoa grindings fell -7.8% y/y to 325,895 MT, a bigger decline than expectations of -6% y/y and the lowest for a Q1 in 17 years. Conversely, the Cocoa Association of Asia reported that Q1 Asian cocoa grindings unexpectedly rose +5.2% y/y to 223,503 MT, stronger than expectations of a decline of -6.7% y/y.
Smaller cocoa supplies from Nigeria, the world’s fifth-largest cocoa producer, are supportive for prices. On May 28, Bloomberg reported that Nigerian cocoa exports in April fell -20% y/y to 14,921 MT. 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.
In February, Ghana cut the official price it pays its cocoa farmers by nearly 30% for supplies for the 2025/26 growing season. In March, the Ivory Coast also said it would cut cocoa farmers’ pay by 57%, effective for the mid-crop harvest that began in March. The Ivory Coast and Ghana produce more than half of the world’s cocoa.
The outlook for a smaller global cocoa surplus is supportive of cocoa prices. On April 29, StoneX 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 weather event. StoneX also cut its 2025/26 global cocoa surplus forecast to 247,000 MT from a January estimate of 287,000 MT.
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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