As of today, September ICE NY cocoa (CCU26) is down 40 points (-0.79%) and September ICE London cocoa #7 (CAU26) is down 62 points (-1.62%). Cocoa prices are experiencing downward pressure due to pre-weekend liquidation ahead of the U.S. holiday. Additionally, rising cocoa inventories, which reached a 1.75-year high of 3,017,796 bags as of Wednesday, are contributing to the decline.
Over the past two weeks, cocoa prices had surged over 20% to reach 5.5-month highs amidst concerns about the upcoming cocoa harvest in West Africa. Heavy rains have cut off farmers from farms and ports, increasing the risk of diseases that threaten yields. Meanwhile, Nigeria’s cocoa exports for May rose 28% year-over-year to 18,034 MT, indicating stronger global supply, while Q1 grindings for North America and Europe fell by 3.8% and 7.8%, respectively, highlighting weak global demand.
Looking forward, forecasts suggest a potential reduction in global cocoa supplies. Nigeria’s Cocoa Association anticipates a decline in production by 11% for the 2025/26 crop year. The Ivory Coast and Ghana, which produce more than half of the world’s cocoa, have also significantly cut the prices they pay to farmers, with Ghana reducing payments by nearly 30% and the Ivory Coast by 57% for the mid-crop harvest.
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