Cocoa Surges on Ivorian Rain Disruptions as Supply Fears Intensify

December ICE NY cocoa (CCZ26) finished up +197 (+3.47%), and December ICE London cocoa #7 (CAZ26) rose +143 (+3.37%) on Monday.

Cocoa prices extended gains for a second consecutive session, hitting two-week highs. Supply worries are driving the rally after heavy rainfall in the Ivory Coast flooded roads and damaged bridges, delaying cocoa shipments to ports.

Medium-term support also remains firm. The US Climate Prediction Center flagged that the El Niño pattern that emerged last month across the equatorial Pacific could rank among the strongest in over 75 years. El Niño typically brings warmer, drier conditions to West Africa, which can reduce soil moisture, stress cocoa trees, and weigh on yields.

Last Thursday, cocoa prices dropped to 2.25-month lows on demand concerns after Lindt & Sprungli cut chocolate prices for a second time this year and trimmed its 2026 organic sales growth outlook to 0%–2% from 4%–6%, citing weak consumer sentiment.

Abundant supply signals are also capping upside. Bloomberg reported that Ivory Coast farmers shipped 2.18 MMT of cocoa to ports in the current international marketing year (October 1, 2025 – September 27, 2026), up 19.8% year-over-year. Note that the Ivory Coast shifted its 2026-27 marketing year to start September 1, though Bloomberg continues reporting on the old schedule.

Output has been strong recently. The Ivory Coast regulator, Le Conseil du Café Cacao, said on September 2 that harvest from June 2025 to June 2026 reached 2.06 MMT, up 30% from 1.58 MMT a year earlier.

Rising inventories are another headwind, with ICE cocoa stocks climbing to a 2.25-year high of 3,525,434 bags on Monday.

Early scouting of the 2026/27 Ivory Coast crop offers some support, however, showing below-average cherelle formation and poor pod development. The average outlook is 1.8 MMT for the season starting in September, down 18% from roughly 2.2 MMT in 2025/26. Cloudy, low-sunshine conditions in the Ivory Coast and Ghana have also fueled black pod disease, degrading bean quality.

Ghana, the world’s second-largest producer, adds to the bullish case. On August 20, Ghana’s Cocoa Board estimated the 2026/27 crop at 650,000 MT, down 13% from 750,000 MT in 2025/26.

On the surplus side, StoneX cut its 2026/27 global cocoa surplus forecast to 25,000 MT from 149,000 MT in April, while Transgraph Consulting expects the global surplus to shrink to 80,000 MT in 2026-27 from 415,000 MT in 2025-26, on production falling to 4.87 MMT from 5.11 MMT.

Ghana’s COCOBOD projected on July 30 that 2026/27 output could fall to 450,000–550,000 MT from 750,000 MT, citing swollen shoot disease, farm aging, and potential El Niño weather. For the current season, Ghana’s board reported on August 26 that 750,000 MT had been harvested, up 25.6% from 597,000 MT in 2024/25.

Demand was mixed in Q2. European cocoa grindings fell 4.6% to 316,366 MT, the lowest Q2 level in six years, versus expectations of a 1.5% decline. North American grindings, however, rose 7.7% y/y to 109,659 MT, beating expectations of a 1% drop, while Asian grindings climbed 25% y/y to 224,646 MT versus a 9% forecast.

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