Cocoa Prices Supported by Dry Conditions in West Africa

Could ICE NY cocoa (CCK26) in the present day is up +60 (+1.82%), and Could ICE London cocoa #7 (CAK26) is down -12 (-0.48%).

Cocoa costs are blended in the present day, with NY cocoa posting a 2-week excessive.  Dry circumstances in West Africa are supportive of cocoa costs, as latest rainfall has been inadequate to ease drought issues within the Ivory Coast and Ghana.  In accordance with the African Flood and Drought Monitor, as of March 29, drought circumstances blanket greater than half of the Ivory Coast and about two-thirds of Ghana.

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Positive aspects in cocoa are restricted, and London cocoa turned decrease in the present day amid issues about chocolate demand.  Early estimates for chocolate sweet gross sales this Easter vacation, a chief seasonal time for chocolate consumption, are monitoring towards an estimated decline of about 5% from final 12 months, based on Bloomberg Intelligence.

An extreme quick place by funds in London cocoa might add gas to any short-covering rally.  Final Friday’s weekly Dedication of Merchants (COT) report confirmed funds boosted their quick place in London cocoa by 2,077 web quick positions to 30,375, probably the most in additional than 4 years.

The closure of the Strait of Hormuz is supportive for cocoa costs because it has decreased fertilizer provides, boosted world transport charges, insurance coverage prices, and gas costs, thereby elevating cocoa importers’ prices.

As well as, slowing cocoa deliveries to ports within the Ivory Coast is supportive of costs.  Monday’s cumulative information from the Ivory Coast confirmed that farmers shipped 1.43 MMT of cocoa to ports within the present advertising 12 months (October 1, 2025, by means of March 29, 2026), down -0.7% from 1.44 MMT in the identical interval a 12 months in the past.  

Cocoa costs had been below strain over the previous three weeks, posting 3-week lows final Thursday amid expectations of a bumper West African cocoa crop.

Ample provides are additionally weighing on cocoa costs, as ICE cocoa inventories rose to an 8.25-month excessive of two,362,668 luggage on Tuesday.

Final month, Ghana lower the official value it pays its cocoa farmers by almost 30% for provides for the 2025/26 rising season, and the Ivory Coast additionally mentioned it could lower cocoa farmer pay by 57% that will kick in for the mid-crop harvest that began this month.  The Ivory Coast and Ghana produce greater than half of the world’s cocoa.

Demand issues have hammered cocoa costs as shoppers proceed to balk on the excessive value of chocolate.  On January 28, Barry Callebaut AG, the world’s largest bulk chocolate maker, reported a -22% decline in gross sales quantity in its cocoa division for the quarter ending November 30, citing “detrimental market demand and a prioritization of quantity towards higher-return segments inside cocoa.”

Grinding reviews additionally confirmed weak demand.  On January 15, the European Cocoa Affiliation reported that This autumn European cocoa grindings fell -8.3% y/y to 304,470 MT, an even bigger decline than expectations of -2.9% y/y and the bottom for a This autumn in 12 years.  On December 16, the Cocoa Affiliation of Asia reported that This autumn Asian cocoa grindings fell -4.8% y/y to 197,022 MT.  Additionally, the Nationwide Confectioners Affiliation reported This autumn North American cocoa grindings rose solely +0.3% y/y to 103,117 MT.

Additionally undercutting cocoa costs are greater exports from Nigeria, the world’s fifth-largest cocoa producer.  On February 17, Bloomberg reported that Nigerian Dec cocoa exports rose +17% y/y to 54,799 MT.  Nigeria’s Cocoa Affiliation tasks that Nigerian cocoa manufacturing in 2025/26 will fall by -11% y/y to 305,000 MT, from a projected 344,000 MT for the 2024/25 crop 12 months.  

On the bullish facet, the Ivory Coast mentioned its cocoa manufacturing in 2025/26 would fall -10.8% y/y to 1.65 MMT from 1.85 MMT in 2024/25.  On February 10, Rabobank lower its 2025/26 world cocoa surplus estimate to 250,000 MT from a November forecast of 328,000 MT.

As a bearish issue, the Worldwide Cocoa Group (ICCO) on March 2 raised its world 2024/25 cocoa surplus estimate to 75,000 MT from 49,000 MT in November, which was the primary surplus in 4 years.  ICCO estimated that world cocoa manufacturing in 2024/25 climbed by +8.4% y/y to 4.7 MMT.  Wanting forward, StoneX on January 29 forecasted a world cocoa surplus of 287,000 MT within the 2025/26 season and a 267,000 MT surplus for 2026/27. 

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