Cocoa prices surge to $5,964 per tonne -

Cocoa prices settled higher on Wednesday at $5,964 per tonne as they continued to trade sideways between last Tuesday’s three-week low and the 11.5-month high recorded on August 31.

Gains in London cocoa accelerated on Wednesday after the British pound (^GBPUSD) fell to a 1.5-month low. The weaker pound boosts cocoa priced in sterling.

Cocoa prices have been under pressure amid signs of higher cocoa output in the Ivory Coast.

The Ivory Coast cocoa regulator, Le Conseil du Café Cacao, reported on September 2 that the country harvested 2.06 million metric tonnes (MMT) of cocoa from June 2025 to June 2026, up 30% from 1.58 MMT a year earlier.

On Monday, Bloomberg reported that cumulative data from the Ivory Coast, the world’s largest cocoa producer, showed that farmers shipped 2.14 MMT of cocoa to ports in the current international cocoa marketing year—from October 1, 2025, through September 13, 2026—up 18% from the same period a year earlier.

Bloomberg continues to report Ivory Coast shipments based on the international cocoa marketing year.

However, the Ivory Coast moved its marketing year forward this year to begin on September 1, instead of the international start date of October 1.

According to Reuters, based on the Ivory Coast marketing year that began on September 1, 2026, deliveries between September 1 and 13 stood at 26,000 metric tonnes, down 45.8% from the same period of the previous season, October 1 to 12.

Rising cocoa inventories are also weighing on prices after ICE cocoa inventories climbed to a two-year high of 3,436,742 bags on September 4. Inventories stood just below that level at 3,429,334 bags on Wednesday.

On September 2, Barry Callebaut AG, the world’s largest cocoa processor, said the global cocoa market was well supplied, leaving it better prepared to manage risks than during the 2023/24 El Niño weather event that drove cocoa prices to record highs.

Cocoa received support last Wednesday after Ghana’s cocoa industry regulator proposed increasing cocoa farmers’ pay by 6% for the 2026/27 season.

The proposed increase could encourage Ghanaian cocoa farmers to withhold sales and demand higher prices for their produce.

Cocoa prices recently strengthened, with New York cocoa reaching an 11.5-month high on August 31 and London cocoa hitting an 11.5-month high on September 1.

Concerns about the quality of this year’s West African cocoa crops are underpinning cocoa prices.

Cloudy weather and limited sunshine in the Ivory Coast and Ghana are allowing black pod disease to spread, reducing cocoa bean quality.

Concerns about a smaller cocoa crop from Ghana, the world’s second-largest cocoa producer, are also bullish for prices.

On August 20, the Ghana Cocoa Board said that, following a field survey of pod counts, it estimated the country’s 2026/27 cocoa crop at 650,000 metric tonnes, down 13% from 750,000 metric tonnes in the 2025/26 crop year.

Cocoa prices are also receiving underlying support from early surveys of the Ivory Coast’s 2026/27 cocoa crop, which show below-average cherelle formation on cocoa trees, signalling a weak outlook for the main cocoa harvest beginning this month.

Early crop assessments indicate poor pod development and an average production estimate of 1.8 MMT for the season beginning in September, down 18% from about 2.2 MMT in 2025/26.

StoneX, on July 29, reduced its estimate for the 2026/27 global cocoa surplus to 25,000 metric tonnes from the 149,000 metric tonnes forecast in April, citing risks to the West African cocoa crop from an expected El Niño.

In addition, Transgraph Consulting forecast on July 23 that the global cocoa surplus for 2026/27 would decline to 80,000 metric tonnes from 415,000 metric tonnes in 2025/26.

The projected decline is mainly due to an expected fall in global production from 5.11 MMT in 2025/26 to 4.87 MMT in 2026/27.

In another bullish factor, Ghana’s cocoa regulator, COCOBOD, projected on July 30 that the country’s 2026/27 cocoa production could fall to between 450,000 and 550,000 metric tonnes from the 750,000 metric tonnes projected for 2025/26.

COCOBOD attributed the expected decline to the combined effects of swollen shoot disease, ageing cocoa farms and the likelihood of adverse weather caused by the El Niño pattern.

However, production remains strong for the current marketing year.

The Ghana Cocoa Board reported on August 26 that 750,000 metric tonnes of cocoa had been harvested for the 2025/26 season, which ends this month. This represents a 25.6% increase from 597,000 metric tonnes recorded in 2024/25.

Cocoa prices have underlying medium-term support from future weather concerns.

On July 8, the United States Climate Prediction Center said the El Niño weather pattern that emerged across the equatorial Pacific in June would likely be one of the strongest in more than 75 years.

El Niño typically brings warmer and drier conditions to West Africa, reducing soil moisture, stressing cocoa trees and lowering yields.

Cocoa demand was mixed in the second quarter.

On July 16, the European Cocoa Association reported that second-quarter European cocoa grindings declined by 4.6% to 316,366 metric tonnes. This was larger than the expected 1.5% year-on-year decline and marked the lowest second-quarter level in six years.

However, the National Confectioners Association reported that second-quarter North American cocoa grindings unexpectedly increased by 7.7% year-on-year to 109,659 metric tonnes, significantly exceeding expectations of a 1% decline and easing concerns about cocoa demand.

Asian cocoa demand also improved after the Cocoa Association of Asia reported that second-quarter cocoa grindings rose by 25% year-on-year to 224,646 metric tonnes, well above expectations of a 9% increase.

Source: Barchart.com