September ICE NY cocoa (CCU26) on Thursday closed down -27 (-0.51%), while September ICE London cocoa #7 (CAU26) closed unchanged.
NY cocoa prices fell on Thursday, extending Wednesday’s -4.98% drop to a two-month low as concerns over abundant global supplies persist.
Indications of expanding global cocoa supplies are weighin on prices. Tuesday’s cumulative data from the Ivory Coast showed that farmers shipped 2.10 MMT of cocoa to ports in the current marketing year (October 1, 2025, through July 19, 2026), up +21% from the same period a year ago. Furthermore, Bloomberg reported last Thursday that Nigerian June cocoa exports rose 30% year-over-year to 18,922 MT.
Rising cocoa inventories are bearish for the market after ICE cocoa inventories climbed to a two-year high of 3,308,066 bags on Thursday.
Cocoa prices find underlying support from early surveys of the 2026/27 Ivory Coast cocoa crop, which show below-average cherelle formation on cocoa trees, signaling a weak outlook for the main cocoa harvest beginning in September. However, a senior manager at Expana noted Thursday that the most recent surveys show a substantial improvement in cocoa pod counts compared to the early assessments. Initial crop evaluations indicated poor pod development and an average estimate of 1.8 MMT for the season, down -18% from approximately 2.2 MMT in 2025/26.
Cocoa demand presented a mixed picture in Q2. The European Cocoa Association reported last Thursday that Q2 European cocoa grindings fell -4.6% to 316,366 MT, a steeper decline than the anticipated -1.5% year-over-year and the lowest Q2 level in six years. Conversely, the National Confectioners Association reported that Q2 North American cocoa grindings unexpectedly rose by +7.7% year-over-year to 109,659 MT, significantly exceeding expectations of a -1% decline and easing concerns over demand. Additionally, Asian cocoa demand strengthened as the Cocoa Association of Asia reported that Q2 Asian cocoa grindings rose by +25% year-over-year to 224,646 MT, well above the anticipated +9% growth.
The prospect of a narrower global cocoa surplus supports prices. On Thursday, Transgraph Consulting forecast that the global cocoa surplus in 2026-2027 will shrink to 80,000 metric tons from 415,000 MT in 2025-2026, primarily due to an expected decline in production to 4.87 MMT in 2026-2027 from 5.11 MMT in 2025-2026. StoneX, meanwhile, cut its 2026/27 global cocoa surplus estimate on April 29 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.
Cocoa prices also have underlying medium-term support from potential weather disruptions. On July 8, the US Climate Prediction Center declared that the El Niño weather pattern that emerged across the equatorial Pacific last month is likely to be one of the strongest in over 75 years. An El Niño event typically brings warmer, drier conditions to West Africa, reducing soil moisture, stressing cocoa trees, and lowering yields.
Smaller cocoa supplies from Nigeria, the world’s fifth-largest producer, also support prices. Nigeria’s Cocoa Association projects that Nigerian cocoa production in 2025/26 will fall by -11% year-over-year to 305,000 MT, down from a projected 344,000 MT for the 2024/25 crop year.