West African Weather Boosts Cocoa Yields, Pressuring Prices

ICE NY cocoa (CCH26) fell 88 cents, or 1.48%, while ICE London cocoa #7 (CAH26) dropped 48 cents, or 1.11%.

Cocoa prices continued to decline this week, with NY cocoa reaching a low not seen in 1.5 weeks. Favorable weather conditions in West Africa are projected to increase yields and supply, putting downward pressure on prices. In the Ivory Coast, farmers note that alternating rain and sunshine is encouraging cocoa tree blooming, while Ghanaian farmers report steady rains that support pod development ahead of the dry harmattan period.

Mondelez, the chocolate manufacturer, reported that the latest cocoa pod count in West Africa is 7% higher than the five‑year average and significantly above last year’s level. The main harvest in the Ivory Coast has commenced, with farmers expressing optimism about its quality.

Expectations of abundant global cocoa supplies have pressured prices lower. Last month, prices fell to their lowest point in 1.75 years, driven by forecasts of a record West African crop. Ivory Coast farmers said their trees are thriving and that recent dry conditions aided bean drying, while Ghanaian growers noted that favorable weather is accelerating pod development.

Rising cocoa arrivals at Ivory Coast ports are bearish for prices. Government data released on Monday indicated that farmers shipped 895,544 metric tons of cocoa to ports during the marketing year beginning October 1 and ending December 14, a 0.2% increase over the 894,009 metric tons shipped in the comparable period last year. The Ivory Coast remains the world’s largest cocoa producer.

Decreasing ICE‑monitored cocoa inventories in U.S. ports are supporting prices. ICE holdings fell to a nine‑month low of 1,642,801 bags on Thursday.

Cocoa prices found some support on Tuesday after Citigroup reduced its 2025/26 global cocoa surplus forecast to 79,000 metric tons, down from a September estimate of 134,000 metric tons.

Cocoa futures are also finding support, as NY cocoa futures will be added to the Bloomberg Commodity Index (BCOM) in January, potentially prompting buying by passive index‑tracking funds. Citigroup estimates that the inclusion could attract up to $2 billion of investment in NY cocoa futures during the first week of January.

Cocoa prices have recently rallied sharply, reaching five‑week highs last Thursday as a tightening global supply outlook emerged. On November 28, the International Cocoa Organization revised its 2024/25 surplus estimate down to 49,000 metric tons, from 142,000 metric tons, and lowered its 2024/25 production forecast to 4.69 million metric tons, down from 4.84 million metric tons. Additionally, Rabobank reduced its 2025/26 surplus outlook to 250,000 metric tons, down from a November forecast of 328,000 metric tons.

On the date of publication,

Rich Asplund

did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.

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