Cocoa prices surged to five-month highs on September 26, 2023, with September ICE NY cocoa (CCU26) up 7.26% and July ICE London cocoa #7 (CAN26) rising 6.85%. This increase is primarily due to heavy rains in the Ivory Coast, which have flooded roads and hindered access to farms and ports, raising concerns about global cocoa supply.
The recent weather phenomena include the formation of an El Niño, with the U.S. National Oceanic and Atmospheric Administration estimating a 67% chance of a “Super El Niño” this year, which typically leads to drier conditions detrimental to cocoa yields. Reports show that cumulative cocoa shipments from the Ivory Coast reached 1.95 million metric tons, an 18.9% increase from the previous year, despite projections of a 10.8% decline in production for the 2025/26 season.
Additionally, cocoa inventories at ICE are nearing a 1.75-year high of approximately 2.9 million bags. Meanwhile, global cocoa grindings declined in North America by 3.8% and in Europe by 7.8% in Q1, contrasting with a 5.2% increase in Asia. Concerns persist over future cocoa supplies as Nigeria projects an 11% decline in production for the 2025/26 crop year.
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