Cocoa prices fell sharply on July 19, 2023, with September ICE NY cocoa closing down 4.98% and London cocoa down 4.84%, reaching two-month lows. This decline follows reports of weak global demand and abundant supply, particularly after Q2 European cocoa grindings dropped by 4.6% to 316,366 MT— the lowest in six years—while North American grindings unexpectedly rose by 7.7% to 109,659 MT.
Further exacerbating the situation, the Ivory Coast reported a 21% increase in cocoa shipments to 2.10 million metric tons compared to last year, and Nigerian cocoa exports rose by 30% to 18,922 MT. Meanwhile, ICE cocoa inventories hit a two-year high of 3,301,990 bags. With forecasts indicating a potential drop in future cocoa supplies due to adverse weather patterns, the outlook remains uncertain.
Looking ahead, early assessments suggest a decline in the upcoming 2026/27 Ivory Coast cocoa crop, estimating a yield of 1.8 MMT, down 18% from the previous season. Additionally, Nigerian production is projected to fall by 11% to 305,000 MT. These trends indicate a tightening global cocoa supply, supporting future price recovery.
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