Cocoa prices declined on Thursday, with September ICE NY cocoa (CCU26) closing down -56 points (-1.10%) and September ICE London cocoa #7 (CAU26) down -71 points (-1.86%). This drop coincided with pre-weekend position squaring, as US markets will be closed for a holiday on Friday, and losses were exacerbated by a rise in the British pound to a two-week high, making cocoa more expensive in sterling.
Cocoa inventories reached a 1.75-year high of 3,017,796 bags on Wednesday, contributing to downward pressure on prices. The prices had previously surged over 20% in two weeks due to concerns over the West African cocoa crop, influenced by heavy rains in Ivory Coast and Ghana that have jeopardized access to farms and increased the risk of disease. Early estimates for the 2026/27 crop season suggest an average production of 1.8 million metric tons, down 18% from 2.2 million metric tons in 2025/26.
Global cocoa demand remains weak, with North American Q1 grindings falling -3.8% year-on-year and European Q1 grindings down -7.8%, marking the lowest levels in 17 years. Conversely, the Cocoa Association of Asia reported a surprising +5.2% increase in Asian Q1 cocoa grindings. Meanwhile, Nigerian cocoa exports in May rose +28% year-on-year, yet forecasts indicate a decline in Nigeria’s cocoa production by -11% to 305,000 metric tons for the 2025/26 crop year.
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