Cocoa futures have extended their recovery, retracing a significant portion of the sharp losses recorded earlier in the week when New York and London benchmarks plunged over 4 per cent.
The initial sell-off was triggered by favourable weather in Ivory Coast and Ghana that boosted early tree flowering. However, prices rapidly found support as traders turned their attention back to long-term West African crop risks, tightening 2026/27 supply forecasts, and a developing El Niño climate pattern.
Near-term market pressure continues to stem from robust current-season deliveries across key producing nations. Cumulative shipments in Ivory Coast reached 2.11 million metric tonnes (MMT) between October 1, 2025, and August 2, 2026, a 20 per cent surge compared to the previous year.
Similarly, Ghana’s cocoa board (COCOBOD) reported a 25.6 per cent expansion in its 2025/26 harvest to 750,000 MT, while Nigerian June exports rose 30 per cent year-on-year. ICE-monitored cocoa inventories also briefly surged to a two-year peak of 3.38 million bags before easing.
Despite current availability, medium-term fundamentals point toward structural supply constraints. Ghana’s COCOBOD projects its 2026/27 crop could drop to between 450,000 MT and 550,000 MT due to swollen shoot disease, ageing plantations, and adverse weather.
In Ivory Coast, early farm surveys reveal below-average cherelle formation and poor pod development, lowering main crop projections by 18 per cent to 1.8 MMT. Analysts at StoneX and Transgraph Consulting have consequently slashed their global cocoa surplus forecasts for 2026/27.
Compounding production concerns, the US Climate Prediction Centre confirmed that the emerging El Niño pattern could become one of the strongest in 75 years.
El Niño historically brings dry, high-temperature conditions to West Africa, suppressing soil moisture during critical pod establishment windows.
Meanwhile, global Q2 grinding data presented a mixed demand picture: European processing dropped 4.6 per cent, but North American grindings unexpectedly surged 7.7 per cent and Asian processing jumped 25 per cent, easing broader demand contraction fears.
Source: Barchart
