Cocoa Prices Surge to Multi-Month Highs Amid West African Weather Woes and Supply Concerns

September ICE NY cocoa (CCU26) closed up +293 points (+5.09%), while September ICE London cocoa #7 (CAU26) gained +228 points (+5.35%) on Wednesday. This marked a third consecutive session of sharp gains, pushing NY cocoa to a six-month peak and London cocoa to a seven-month high.

The rally over the past three weeks has been driven by heavy rains in Ivory Coast and Ghana, which have flooded roads and cut off farmers’ access to fields and ports, threatening global cocoa supplies. The excessive moisture also raises concerns about brown rot and black pod diseases, which reduce yields and jeopardize the upcoming harvest.

Medium-term price support stems from ongoing weather concerns. On June 10, Japan’s Meteorological Agency confirmed the onset of an El Niño pattern across the equatorial Pacific. El Niño typically brings warmer, drier conditions to West Africa, stressing cocoa trees and lowering yields. The US National Oceanic and Atmospheric Administration estimates a 67% chance of a “Super El Niño” this year—one of the strongest on record.

Early surveys of the 2026/27 Ivory Coast crop also suggest below-average cherry formation, signaling a weak harvest season beginning in September. Current estimates project 1.8 million metric tons for the season, down 18% from the 2.2 million expected for 2025/26.

On the supply side, ICE cocoa inventories reached a nearly two-year high of 3,099,445 bags on Wednesday. Meanwhile, the Ivory Coast reported over 260,000 metric tons of cocoa reaching ports so far this season, with cumulative shipments totaling 2.04 million metric tons—up 20% year-over-year. Ivory Coast production for 2025/26 is projected to fall 10.8% to 1.65 million metric tons.

Nigerian cocoa exports rose 28% year-over-year in May to 18,034 metric tons, though Nigeria—the world’s fifth-largest producer—expects production to decline 11% to 305,000 metric tons in 2025/26. Additionally, both Ivory Coast and Ghana, which together produce over half the world’s cocoa, have implemented significant farmer pay cuts, with Ghana reducing prices by 30% and Ivory Coast cutting payments by 57%.

Global cocoa grindings have also disappointed. North American Q1 cocoa grindings fell 3.8% year-over-year to 106,087 metric tons, while European Q1 grindings dropped 7.8% to 325,895 metric tons—the lowest Q1 level in 17 years. Unexpectedly, Asian Q1 grindings rose 5.2% to 223,503 metric tons.

The outlook points to a tighter global cocoa surplus. StoneX recently revised its 2026/27 global surplus estimate down to 149,000 metric tons from a previous forecast of 267,000 metric tons, citing weather-related supply risks in West Africa. The 2025/26 surplus forecast was also lowered to 247,000 metric tons from 287,000 metric tons.

Rich Asplund does not hold positions in any securities mentioned in this article. All information is for informational purposes only. View the Barchart Disclosure Policy for details.

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