As of today, December ICE NY cocoa (CCZ26) is down 2.97% at -$201, while December ICE London cocoa #7 (CAZ26) has decreased by 0.91% or -$44, following a retreat from an 11-month high. The drop in prices coincides with increased supplies from the Ivory Coast, which reported cocoa shipments of 2.14 million metric tons (MMT) for the current marketing year, marking a 19% rise from the previous year.
Meanwhile, the Ivory Coast cocoa regulatory body aims to boost processing capacity to 1.3 MMT by 2026/27, up from 650,000 MT this year. However, concerns persist regarding the quality of cocoa beans, as black pod disease is spreading amid adverse weather conditions. Ghana has also projected a 13% decline in its 2026/27 cocoa crop to 650,000 MT, compared to 750,000 MT the previous year, adding further pressure on prices.
Current cocoa inventories have surged to a two-year high of 3,411,016 bags, contributing to the bearish outlook. Despite this, mixed demand reports indicate a 4.6% drop in European cocoa grindings but a surprising 7.7% increase in North American demand for Q2, which could offer some counterbalance.
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