Today Markets Analysis: December ICE New York cocoa futures fell 1.66% to 5,920 on Tuesday, while December ICE London cocoa declined 1.55% to 4,307. The latest move lower reflects growing evidence of adequate near-term supply, particularly from Ivory Coast, although concerns over the quality and size of the next West African crop continue to provide medium-term support.

The cocoa market is therefore facing a clear split: strong current production and rising inventories are bearish, while lower crop forecasts, disease, weather risks and expectations of tighter future supply remain bullish.

Cocoa Prices Retreat as Supply Signals Improve

The latest decline follows evidence that Ivory Coast has delivered substantially more cocoa to ports than during the comparable period last season.

Cumulative Ivory Coast shipments reached approximately 2.14 million metric tons between October 1, 2025 and September 13, 2026, according to Bloomberg data, representing an 18% increase from the previous year.

However, the picture becomes less straightforward when the country’s revised marketing calendar is considered. Ivory Coast has moved the start of its marketing year to September 1, and deliveries between September 1 and September 13 were reportedly 26,000 MT, down 45.8% from the comparable period.

This creates an important distinction between strong completed-season production and potentially weaker early indications for the new crop.

Bullish Sentiment

• Ghana crop forecast: Ghana’s 2026/27 production estimate has been cut to around 650,000 MT, down 13% from 750,000 MT.
• Ivory Coast crop concerns: Early assessments point to poor pod development and below-average cherelle formation.
• West African disease: Cloudy weather and limited sunshine are contributing to black pod disease concerns.
• El Niño risk: Warmer and drier conditions could reduce soil moisture and pressure cocoa yields.
• Global surplus shrinking: StoneX reduced its 2026/27 global surplus forecast to only 25,000 MT from 149,000 MT.
• Ghana farmer prices: A proposed 6% increase in farmer payments could encourage producers to delay selling.
• Future supply: Several forecasts point toward lower West African production during the coming season.

Bearish Sentiment

• Ivory Coast shipments: Cumulative deliveries remain substantially above the previous year’s level.
• Ivory Coast production: The regulator reported 2.06 MMT harvested for the June 2025–June 2026 period, up 30% year-on-year.
• ICE inventories: Exchange stocks remain close to a two-year high at 3.42 million bags.
• Global supply: Barry Callebaut has described the global cocoa market as well supplied.
• Ghana’s current crop: Ghana harvested approximately 750,000 MT in 2025/26, up 25.6% year-on-year.
• European demand: Q2 European cocoa grindings fell 4.6%, reaching their lowest level for the quarter in six years.
• Recent price strength: New York and London cocoa recently reached 11.5-month highs, leaving the market vulnerable to profit-taking.

Ivory Coast Supply Provides Near-Term Price Pressure

Ivory Coast remains the dominant variable for the cocoa market. The country’s reported 2.06 MMT harvest for the latest season represents a significant increase from the previous year and provides evidence that supply conditions have improved substantially.

The increase in cumulative port arrivals is reinforcing that bearish signal.

However, traders are increasingly looking beyond the completed crop and toward the quality and development of the 2026/27 harvest. Poor pod formation and disease concerns could become more important if the new crop fails to match earlier production expectations.

Cocoa Inventories Remain a Bearish Signal

ICE cocoa inventories have risen to levels not seen for around two years.

Stocks reached 3,436,742 bags on September 4 before easing modestly to 3,421,650 bags on Tuesday.

High exchange inventories indicate that physical availability remains relatively comfortable, reducing the immediate scarcity premium in cocoa futures.

That is particularly important after the market’s strong rally during August, when New York cocoa reached an 11.5-month high.

Ghana and Ivory Coast Crop Risks Keep the Bullish Case Alive

While current production data are bearish, the outlook for the next crop is considerably less comfortable.

Ghana’s Cocoa Board estimates the 2026/27 crop at 650,000 MT, while earlier projections from Ghana’s cocoa regulator have placed possible production even lower, at between 450,000 and 550,000 MT, reflecting concerns over swollen shoot disease, ageing farms and adverse weather.

Ivory Coast is also facing questions about the next main crop. Early surveys reportedly show below-average cherelle formation and poor pod development, with some estimates placing the coming crop around 1.8 MMT, compared with approximately 2.2 MMT previously.

If those forecasts prove accurate, the current supply surplus could narrow considerably.

El Niño Creates a Medium-Term Weather Risk

Weather remains one of the biggest upside risks for cocoa prices.

An El Niño pattern can produce warmer and drier conditions across West Africa, potentially reducing soil moisture and stressing cocoa trees during critical development periods.

The market is therefore pricing two different time horizons. Near-term fundamentals point toward adequate availability, while the medium-term weather outlook raises the possibility of declining production.

That distinction could keep volatility elevated even if inventories remain high.

Cocoa Demand Sends a Mixed Signal

Demand indicators are also divided geographically.

European Q2 cocoa grindings fell 4.6% to 316,366 MT, a larger decline than expected and the weakest Q2 result in six years.

North American grindings, however, rose 7.7% year-on-year to 109,659 MT, significantly exceeding expectations.

Asian demand was stronger still, with Q2 grindings increasing 25% to 224,646 MT, according to the Cocoa Association of Asia.

The regional divergence suggests that the demand outlook is not uniformly weak, but Europe’s decline remains an important bearish factor for the global market.

What Traders Are Watching Next

The key question is whether the cocoa market continues to focus on comfortable current supply or begins to price in the risks surrounding the 2026/27 West African crop.

Traders will be watching:

• New Ivory Coast arrivals and early-season production data
• ICE certified inventories
• Ghana crop-development reports
• Black pod disease and other crop-quality indicators
• West African rainfall and sunshine levels
• El Niño developments
• Global cocoa grindings
• Producer selling behaviour following Ghana’s proposed farmer-pay increase

A continued rise in inventories would reinforce the bearish case, while evidence of weaker-than-expected crop development could shift attention back toward future supply shortages.

Currency Hedger View

Cocoa is priced internationally in major currencies, making USD movements an important secondary factor for producers, processors and commercial buyers. A stronger dollar can affect purchasing costs and international demand, while currency volatility can complicate forward procurement and margin planning.

For companies with significant cocoa exposure, the combination of commodity-price volatility and foreign-exchange risk makes structured hedging increasingly relevant.

Currency Hedger — www.currencyhedger.com

Market analysis contributed by Currency Hedger, an Octalas Group division specialising in foreign exchange, currency risk and hedging.

Today Markets View

Cocoa is currently caught between strong present-day supply and increasingly concerning future crop fundamentals.

The bearish argument is supported by higher Ivory Coast production, strong cumulative shipments, elevated ICE inventories and evidence that the global market is currently well supplied. The recent decline in European grindings also provides a demand-side warning.

Against that, Ghana’s lower crop forecast, poor early pod development in Ivory Coast, disease risks and the potential impact of El Niño create a significant medium-term bullish argument.

“Cocoa is increasingly becoming a two-horizon market. Current inventories and Ivory Coast production are weighing on prices today, but the next West African crop carries enough disease and weather risk to keep the longer-term supply outlook uncertain.” — Louis Roche, Analyst, Today Markets

Bottom Line

December New York and London cocoa futures fell more than 1.5% on Tuesday as evidence of adequate supply and elevated inventories encouraged selling.

The bearish case is centred on stronger Ivory Coast production, higher cumulative shipments, large ICE inventories and weaker European grinding demand.

The bullish case rests on lower Ghana crop expectations, deteriorating crop-quality indicators, disease risks and the potential impact of El Niño on West African yields.

For now, cocoa remains a market where strong current supply is competing directly with the risk of tighter future production.

Analysis by Louis Roche, Analyst, Today Markets

Market analysis contributed by Currency Hedger, an Octalas Group division specialising in foreign exchange, currency risk and hedging.