Cocoa Futures Fall to 20-Month Low

Cocoa futures eased to below $4,200 per tonne but stayed close to recent 3-month highs, supported by receding short covering while fundamentals stayed broadly supportive. Traders continued to closely monitor reports of irregular rainfall in parts of Ivory Coast and Ghana, as well as growing concerns about the potential return of adverse weather patterns linked to El Niño in the coming months. At the same time, rising geopolitical tensions in the Middle East, including disruptions in the Strait of Hormuz, have pushed up energy and transportation costs, increasing fertilizer prices and tightening global agricultural supply chains. This is raising concerns over output in key West African producers, particularly the Ivory Coast. Meanwhile, Ghana plans to raise $1 billion via domestic bonds to finance cocoa purchases ahead of the 2026/27 crop season, as it moves to restructure cocoa financing amid ongoing debt strains.

Cocoa decreased 5% to 4205.78 USD/T

Cocoa futures rose further to breach $4,400 per tonne, the highest level since late January, fueled by fund short covering and growing supply risks. While weather conditions in West Africa, particularly in the Ivory Coast and Ghana, have recently improved, supporting short-term output and allowing for a gradual rebuilding of global stocks, the outlook remains uncertain. Irregular rainfall during the key mid-crop season continues to pose risks, especially if dry spells persist and affect yields and bean quality in the latter stages of the harvest. Moreover, fertilizer shortages and the rising likelihood of the El Niño phenomenon are expected to constrain 2026/27 production, with farmers in top grower Ivory Coast already reporting difficulties securing inputs amid cash constraints. Reflecting this, StoneX has lowered its global cocoa surplus forecasts for both 2025/26 and 2026/27, signaling tighter supply conditions. On the demand side, conditions remain subdued.