Rising Cocoa Stocks and Brazilian Export Pressure Offset Growing West African Crop Risks

Cocoa futures extended their three-week decline on Thursday, with New York and London contracts falling almost 5% as rising exchange inventories and concerns over increased exporter selling continued to weigh on the market.

December ICE New York cocoa fell 275 points, or 5.04%, while December London cocoa declined 198 points, or 4.84%. Both markets reached fresh five-week lows as ICE cocoa inventories climbed to 3,740,476 bags, their highest level in approximately two and a half years.

The increase in available exchange stocks is easing immediate supply concerns, while weakness in the Brazilian real is creating an additional incentive for exporters to sell cocoa into international markets.

However, the longer-term production outlook remains uncertain. Reduced arrivals from Ivory Coast, concerns about Ghana’s next crop and the threat of a powerful El Niño weather pattern are raising the possibility of lower global production during the 2026/27 season.

The market is therefore facing a growing divide between improving near-term availability and the risk of a tighter supply balance over the coming months.

Market Snapshot

Indicator	Latest position
December 2026 New York cocoa	-275 points (-5.04%)
December 2026 London cocoa	-198 points (-4.84%)
ICE cocoa inventories	3,740,476 bags
Inventory position	2.5-year high
Ivory Coast port arrivals, season to date	173,158 MT
Ivory Coast arrivals, year-over-year	-43%
Nigeria September cocoa exports	19,343 MT
Nigeria export growth	+33% year over year
StoneX 2026/27 production forecast	4.74 MMT
StoneX 2026/27 projected balance	64,000 MT deficit
StoneX 2025/26 projected balance	494,000 MT surplus
North American Q3 grindings	-2.5%
Asian Q3 grindings	+29%
European Q3 grindings	+3.2%

Cocoa Futures Extend Three-Week Decline

New York and London cocoa futures continued to weaken, with both contracts recording substantial losses on Thursday.

The latest declines extend a three-week downward trend, with New York cocoa reaching a five-week low and London cocoa falling to a three-month low.

The most immediate pressure is coming from the increase in ICE-certified inventories. Stocks have steadily increased since the beginning of the year, reaching 3,740,476 bags.

Rising exchange inventories suggest that more cocoa is becoming available within the deliverable market, reducing concerns about immediate shortages and encouraging selling pressure.

The market is also responding to the possibility of stronger Brazilian export activity. A weaker Brazilian real increases the local-currency value of dollar-denominated cocoa sales, potentially encouraging exporters to bring more supply to international markets.

Although Brazil accounts for only around 4–5% of global cocoa production, it remains the world’s seventh-largest producer and contributes to the wider export outlook.

ICE Cocoa Inventories Reach 2.5-Year High

The increase in ICE inventories is one of the most important bearish developments for cocoa prices.

Stocks reached 3,740,476 bags on Thursday, their highest level in approximately two and a half years.

The steady accumulation of exchange inventories is helping to ease concerns about immediate physical availability. This is particularly significant following the extreme price volatility associated with previous supply shortages.

Higher certified stocks can weaken the urgency among buyers to secure immediate supplies and provide additional confidence that nearby delivery requirements can be met.

However, exchange inventories should be considered alongside wider producing-country arrivals, crop estimates and consumption trends. A rise in certified stocks does not necessarily eliminate the risk of future production shortages.

Brazilian Real Weakness Could Increase Cocoa Export Selling

Currency movements are creating another source of pressure for international cocoa prices.

The Brazilian real fell to a 10.25-month low against the US dollar following President Luiz Inácio Lula da Silva’s surprise presidential election victory.

A weaker real increases the local-currency value of dollar-denominated export receipts, potentially encouraging Brazilian cocoa producers and exporters to increase international sales.

Brazil’s contribution to global cocoa production is smaller than that of West African producers and Ecuador, but additional Brazilian selling could add to available export supply while the market is already under pressure from rising ICE inventories.

The direction of the real will therefore remain relevant to the short-term cocoa outlook, particularly if currency weakness persists.

Nigeria Cocoa Exports Increase as Higher Prices Encourage Selling

Export activity in Nigeria is also adding to the supply picture.

September cocoa-bean exports increased 33% year over year to 19,343 tonnes.

The increase suggests that higher cocoa prices have encouraged exporters to bring more beans into the international market.

Although Nigeria is not as dominant as Ivory Coast or Ghana, stronger exports from smaller producing countries can contribute to overall availability when major origins are experiencing changing production conditions.

The latest Nigerian figures therefore reinforce the near-term supply argument weighing on futures.

Ivory Coast Cocoa Arrivals Fall Sharply

Despite rising exchange inventories, supply indicators from West Africa remain a source of support for cocoa prices.

Government data from Ivory Coast showed that farmers delivered 50,705 MT of cocoa to ports during the week ending November 1, compared with 89,621 MT during the corresponding week last year.

This represents a substantial decline in weekly arrivals.

For the marketing season to date, from October 1 through November 1, Ivory Coast port arrivals reached 173,158 MT, down 43% from 304,840 MT during the comparable period last year.

The figures highlight a significant reduction in cocoa deliveries from the world’s largest producing country.

There is an important reporting consideration: Ivory Coast moved the start of its 2026/27 marketing year forward by one month to September 1, while the Bloomberg shipment figures referenced here continue to use the international cocoa marketing year beginning October 1.

Despite this timing difference, the reported decline in arrivals is a significant indicator for the market.

Lower deliveries could tighten physical availability if the weakness persists, particularly as the main crop harvest progresses.

Global Cocoa Demand Shows a Mixed Picture

Demand data from the three major cocoa-grinding regions reveals contrasting trends.

The National Confectioners Association reported that North American cocoa grindings fell 2.5% year over year in Q3 to 109,978 MT, weaker than expectations for no change.

This suggests that higher cocoa costs and changing purchasing patterns may be weighing on processing activity in North America.

However, Asian demand was considerably stronger. The Cocoa Association of Asia reported that Q3 grindings increased by a record 29% year over year to 233,767 MT, substantially exceeding expectations for 15% growth.

European cocoa grindings also surprised positively, rising 3.2% to 348,215 MT against expectations for a 3.9% decline.

The regional divergence suggests that global cocoa demand is not weakening uniformly.

North American processing remains under pressure, but strong Asian growth and a positive European result indicate that demand conditions are more resilient in other major markets.

El Niño Threatens Future Cocoa Production

The longer-term cocoa outlook is increasingly influenced by weather risks across major producing regions.

The US Climate Prediction Center has warned that the El Niño pattern emerging across the equatorial Pacific could become one of the strongest in more than 75 years.

El Niño typically brings warmer and drier conditions to parts of West Africa, potentially reducing soil moisture, stressing cocoa trees and damaging yields.

This is particularly important for Ivory Coast and Ghana, which together represent a major share of global cocoa production.

Weather disruption could also affect Indonesia and Ecuador, adding further uncertainty to the global supply outlook.

The potential impact is already being reflected in some industry forecasts.

StoneX Forecasts a 2026/27 Global Cocoa Deficit

StoneX has revised its global cocoa balance outlook for 2026/27, moving from an anticipated surplus of 25,000 MT to a deficit of 64,000 MT.

The forecast follows an estimated 494,000 MT surplus for 2025/26.

StoneX expects global cocoa production to decline by 9.6% year over year to 4.74 MMT in 2026/27, driven by lower output in Indonesia, Ivory Coast and Ecuador.

This represents a substantial potential reduction in production and highlights the vulnerability of the market to weather-related disruption.

The forecast is particularly important because it suggests that the current inventory-driven price weakness could eventually give way to tighter physical conditions.

However, the projected deficit remains a forecast rather than confirmation of an immediate shortage. Actual production, processing and inventory data will determine whether the anticipated tightening materialises.

Ivory Coast and Ghana Face Weak 2026/27 Crop Prospects

Early surveys of the 2026/27 Ivory Coast crop are raising concerns about the development of the main harvest.

Assessments indicate below-average cherelle formation, referring to the early development of cocoa pods. This can signal weaker future pod availability and reduced production potential.

The average production estimate for Ivory Coast is approximately 1.8 MMT, down 18% from around 2.2 MMT in 2025/26.

Poor pod development has been linked to cloudy weather and limited sunshine, conditions that have also encouraged the spread of black pod disease and reduced bean quality.

Ghana’s outlook is similarly challenging.

The Ghana Cocoa Board estimated that the country’s 2026/27 crop could reach 650,000 MT, down 13% from 750,000 MT in 2025/26.

COCOBOD has issued a more cautious assessment, projecting production could fall to between 450,000 MT and 550,000 MT because of swollen shoot disease, ageing cocoa farms and potentially adverse El Niño weather.

There is an important distinction between Ghana’s previous-season production and the coming crop. The cocoa board reported that 750,000 MT had been harvested for the 2025/26 season by August 26, up 25.6% from 597,000 MT in 2024/25.

This stronger previous-season performance contrasts with the weaker outlook for 2026/27.

Bullish Sentiment

1. Ivory Coast arrivals decline: Season-to-date port deliveries have fallen 43% year over year to 173,158 MT.
2. Potential global production deficit: StoneX forecasts a 64,000 MT deficit in 2026/27 following a substantial production surplus in 2025/26.
3. El Niño weather risk: Potentially severe weather disruption could reduce yields across West Africa, Indonesia and Ecuador.
4. Weak Ivory Coast crop development: Below-average cherelle formation points towards a potentially smaller main harvest.
5. Ghana production concerns: Forecasts indicate a possible significant decline in Ghana’s 2026/27 output.
6. Strong Asian grindings: Q3 cocoa processing in Asia increased by a record 29% year over year.
7. European demand resilience: European grindings increased 3.2%, outperforming expectations for a decline.

Bearish Sentiment

1. Rising ICE inventories: Exchange stocks have reached 3,740,476 bags, the highest level in approximately 2.5 years.
2. Brazilian currency weakness: A weaker real could encourage additional cocoa export selling.
3. Higher Nigerian exports: September shipments increased 33% year over year to 19,343 tonnes.
4. North American demand weakness: Q3 grindings declined 2.5% to 109,978 MT.
5. Previous-season global surplus: StoneX estimates a 494,000 MT surplus for 2025/26.
6. Continued price weakness: Both New York and London cocoa have extended their three-week decline and reached fresh multi-week lows.
7. Higher available stocks: Rising inventories are easing immediate concerns about deliverable cocoa supplies.

Cocoa Price Forecast: What Traders Are Watching

The immediate outlook remains bearish following Thursday’s sharp decline and the continued accumulation of ICE inventories.

The market is likely to remain sensitive to further stock increases, Brazilian export activity and evidence that West African supply is becoming more readily available.

However, the longer-term outlook is more balanced.

The sharp decline in Ivory Coast arrivals, weak early crop assessments and the risk of El Niño-related disruption could create a tighter supply environment during the 2026/27 season.

The most important indicators to monitor are:

• ICE inventories: Whether stocks continue increasing or begin to stabilise.
• Ivory Coast arrivals: Whether the 43% year-over-year decline persists as the main crop harvest develops.
• Ghana production: Whether actual output moves towards the lower COCOBOD estimates.
• Brazilian export activity: Whether continued real weakness encourages greater international selling.
• Global grindings: Whether strong Asian and European processing can offset weaker North American demand.
• El Niño developments: Whether weather conditions begin to materially affect production in West Africa and other major origins.

A sustained recovery in cocoa prices will require evidence that lower producing-country arrivals and crop concerns are translating into tighter physical availability.

Supply Outlook

The cocoa supply outlook is becoming increasingly divided between current inventory availability and future production risk.

Rising ICE inventories and increased Nigerian exports are helping to ease immediate supply concerns. Brazilian currency weakness could add to this pressure by encouraging exporters to sell more cocoa internationally.

However, Ivory Coast arrivals are substantially lower, while early assessments suggest weaker crop development in both Ivory Coast and Ghana.

StoneX’s projected production decline of 9.6% in 2026/27 highlights the potential scale of the supply challenge.

The critical question is whether the current inventory build-up will be sufficient to offset lower production across major growing regions.

Demand Outlook

Global cocoa demand remains uneven.

North American grindings have weakened, indicating that processing activity in the region remains under pressure. However, Asian grindings have increased sharply, while European processing has also outperformed expectations.

The strength of Asian demand is particularly important given the region’s growing role in global cocoa processing.

If demand continues to improve in Asia and Europe, it could absorb a greater share of available supplies even as North American processing remains weaker.

The balance between regional demand and production availability will be central to the market’s longer-term direction.

Market Outlook for the Coming Sessions

Cocoa prices remain under considerable short-term pressure as rising ICE inventories, Brazilian currency weakness and increased Nigerian exports weigh on sentiment.

Thursday’s losses confirm that sellers remain firmly in control of the immediate market direction.

However, the longer-term supply picture is becoming more uncertain. Lower Ivory Coast arrivals, weak crop assessments in West Africa and the possibility of a powerful El Niño could reduce production during the coming season.

The next phase of trading will depend on whether inventory growth continues to outweigh evidence of deteriorating crop conditions.

For now, the market remains bearish in the short term but faces increasing medium-term production risks. Traders will need confirmation from physical arrivals, crop surveys and inventory data before treating the projected 2026/27 deficit as a catalyst for a sustained price recovery.

Today Markets Analysis

The cocoa market is currently being driven by two opposing forces: rising available inventories and growing concerns about future production.

The immediate pressure is clear. ICE inventories have reached a 2.5-year high, the Brazilian real has weakened sharply and Nigerian exports have increased. These developments are helping to ease supply concerns and explain why prices have continued falling despite the potential for a tighter global balance next season.

However, the decline in Ivory Coast arrivals is significant. Season-to-date deliveries are down 43%, while early crop assessments in Ivory Coast and Ghana suggest that the next main harvest could be substantially weaker.

The threat of El Niño adds another layer of uncertainty, particularly if warmer and drier conditions affect West African production.

The market’s direction will ultimately depend on whether rising inventories can compensate for lower future production. Until that balance becomes clearer, cocoa is likely to remain volatile, with near-term selling pressure competing against increasingly important medium-term supply risks.

Currency Hedger View

Cocoa is traded internationally in US dollars, making foreign-exchange movements an important consideration for chocolate manufacturers, cocoa processors, importers and exporters.

The Brazilian real is particularly relevant to international cocoa supply. A weaker real can encourage Brazilian exporters to increase dollar-denominated sales, potentially adding to global availability and putting pressure on cocoa prices.

For manufacturers importing cocoa beans or cocoa products, a stronger US dollar can increase the local-currency cost of purchases, even when international cocoa prices are declining. Conversely, a weaker dollar can reduce the currency cost of imports for businesses paying in other currencies.

Companies with significant exposure to cocoa procurement should assess both commodity-price movements and foreign-exchange fluctuations when planning supplier payments and managing operating margins.

Currency Hedger helps businesses manage deliverable foreign-exchange exposure, arrange international payments and assess appropriate currency-risk management strategies.

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Disclaimer

This article is provided for general market information and educational purposes only. It does not constitute investment advice, financial advice, a recommendation or an offer to buy or sell any financial instrument. Commodity prices, production estimates and market conditions can change rapidly. Forecasts from different organisations may use different methodologies and assumptions and should not be treated as directly interchangeable. Market scenarios are conditional assessments and are not guarantees of future performance. Trading commodity futures and other financial instruments involves risk and may not be suitable for all investors. Businesses should seek appropriate professional advice when assessing their commodity and foreign-exchange exposures.