Cocoa Futures Plunge as Global Surplus Concerns Weigh on Market

Cocoa futures slipped sharply on Friday as expanding global supplies pressured prices. July ICE NY cocoa (CCN26) fell 4.29%, while July ICE London cocoa #7 (CAN26) dropped 3.63%.

ICE cocoa inventories reached 2.85 million bags, the highest level in 1.75 years. The Ivory Coast, the world’s top producer, recently raised its 2025/26 cocoa forecast to 2.2 million metric tons due to favorable weather conditions.

Year-to-date shipments from the Ivory Coast reached 1.64 million metric tons, up 2.5% year-over-year. Previously, prices had hit four-month highs in May amid El Niño concerns, though the U.S. National Oceanic and Atmospheric Administration now estimates an 82% chance of El Niño conditions developing through year-end.

Some support stems from early indications of a smaller 2026/27 West African crop and steady consumer demand, with better-than-expected earnings from Hershey and Mondelez. However, North American chocolate candy sales slipped 1.3% in the 13 weeks ending March 22, according to Circana.

Bearish signals include weak global cocoa grindings, with North American and European volumes down 3.8% and 7.8% respectively in Q1. Conversely, Asian cocoa processing rose 5.2% year-over-year.

StoneX recently trimmed its 2026/27 global surplus projection to 149,000 metric tons from 267,000 metric tons, though the International Cocoa Organization raised its 2024/25 surplus estimate to 75,000 metric tons.

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