September ICE New York cocoa (CCU26) closed at +75 (+1.41%) on Friday, while ICE London cocoa #7 (CAU26) rose by +49 (+1.23%).
Cocoa prices rebounded on Friday, driven by short‑covering after a two‑week decline that left prices near a two‑week low, and were also supported by a modestly weaker dollar.
President Trump announced late Thursday broad Section 301 tariffs ranging from 10% to 12.5% on 60 nations, citing forced labor concerns and replacing the expired 10% global import tax and a previous reciprocal tariff that the U.S. Supreme Court had struck down. However, the new Section 301 tariffs do not apply to food products and therefore will not affect U.S. cocoa imports.
Cocoa prices have weakened over the past two weeks amid larger global supplies. Tuesday’s cumulative data from Ivory Coast indicated that farmers shipped 2.10 million metric tons of cocoa to ports during the current marketing year (October 1 2025 – July 19 2026), a 21% increase from the same period a year earlier. Bloomberg also reported that Nigerian June cocoa exports rose 30% year‑over‑year to 18,922 metric tons.
Increasing cocoa inventories are bearish for prices, as ICE cocoa stocks rose to a two‑year high of 3,319,249 bags on Friday.
Early surveys of the 2026/27 Ivory Coast cocoa crop indicate below‑average cherelle formation, suggesting a weak outlook for the main September harvest. However, a senior manager at Expana noted that recent surveys show a substantial improvement in cocoa pod counts versus earlier assessments. Initial estimates place the season’s production at 1.8 million metric tons, down 18% from the 2.2 million metric tons recorded in 2025/26.
Cocoa demand showed mixed results in Q2. The European Cocoa Association reported that Q2 European grindings fell 4.6% to 316,366 metric tons, a larger decline than the 1.5% year‑over‑year drop expected and the lowest Q2 level in six years. In contrast, the National Confectioners Association noted an unexpected 7.7% year‑over‑year increase in Q2 North American grindings to 109,659 metric tons, exceeding forecasts of a 1% decline and easing demand concerns. Asian demand also improved, with the Cocoa Association of Asia reporting a 25% year‑over‑year rise in Q2 grindings to 224,646 metric tons, surpassing expectations of a 9% increase.
A smaller projected global cocoa surplus is supportive of prices. Transgraph Consulting forecast that the 2026‑2027 surplus will shrink to 80,000 metric tons from 415,000 metric tons in 2025‑2026, mainly due to a projected decline in production to 4.87 million metric tons from 5.11 million metric tons. StoneX revised its 2026/27 surplus estimate downward to 149,000 metric tons from a January forecast of 267,000 metric tons, citing risks to West African crops from an anticipated El Niño.
Cocoa prices also benefit from medium‑term weather concerns. On July 8, the U.S. Climate Prediction Center said the El Niño pattern that emerged in the equatorial Pacific last month is likely to be one of the strongest in over 75 years. El Niño typically brings warmer, drier conditions to West Africa, reducing soil moisture, stressing cocoa trees and lowering yields.
The outlook for reduced cocoa supplies from Nigeria, the world’s fifth‑largest producer, supports prices. Nigeria’s Cocoa Association projects a 11% year‑over‑year decline in 2025/26 production to 305,000 metric tons, down from a projected 344,000 metric tons for 2024/25.