As of today, September ICE NY cocoa (CCU25) is up +$276 (+3.41%), and September ICE London cocoa #7 (CAU25) has increased by +$169 (+3.14%). The rise in cocoa prices is attributed to decreased exports from the Ivory Coast, which shipped 1.76 million metric tons (MMT) of cocoa this marketing year, a 6% increase from last year but significantly down from a 35% increase in December.
Weather concerns in West Africa are also influencing price increases, as rainfall has remained below the 30-year average, affecting cocoa pod development ahead of the main harvesting season beginning in October. Furthermore, cocoa quality issues and a projected decline in production from Ghana and Nigeria are contributing to the bullish price outlook. Ghana’s cocoa crop is expected to increase by 8.3% by 2025/26, while Nigeria anticipates an 11% drop in production for 2025/26.
Despite the current price rise, lower demand for chocolate is a bearish factor as seen with companies like Lindt & Spruengli AG, which has reduced margin guidance due to disappointing sales. Additionally, recent data from the European Cocoa Association indicates a 7.2% year-on-year decline in Q2 European cocoa grindings, exacerbating concerns in the market.
