Cocoa Falls to 3-Week Low

Cocoa prices fell to around $5,330 per tonne, the lowest level in nearly three weeks, extending their retreat from the eight-month high of $6,455 reached on July 9. Market participants are closely monitoring upcoming earnings from major chocolate producers for indications that higher prices are no longer weighing on consumption. On Tuesday, Lindt said it could introduce selective price cuts in the second half of 2026 to support sales volumes after its half-year results raised questions about the pace of demand growth. Meanwhile, Citigroup adopted a neutral stance on cocoa after previously holding a bullish view, saying it wants more evidence of El Niño-related crop damage and stronger demand before turning positive again. On the supply side, the International Cocoa Organization forecast Indonesia's cocoa production to rise to 220,000 tonnes in the 2025/26 season from 200,000 tonnes a year earlier.

Cocoa decreased 5.08% to 5322.43 USD/T

Cocoa futures traded around $5,500 per tonne, hovering near two-week lows, after weak grinding data from Europe raised demand concerns. Cocoa grindings in Europe extended their decline in Q2, falling 4.6% yoy to 316,366 tonnes, the lowest quarterly total since 2020. By contrast, Asia posted a 25.1% increase, while North America recorded robust growth of 7.7%. Europe's dominant share of global cocoa processing meant the weaker data weighed more heavily on market sentiment. The figures reinforced the view that the recent rally was driven primarily by supply risks in West Africa, El Niño concerns, and speculative buying rather than improving demand fundamentals. On the supply side, despite growing concerns about the upcoming Ivory Coast harvest and climate risks for 2026/27, the market still has more comfortable global stocks than those seen during the 2024 supply crisis. Latest data showed ICE-monitored cocoa inventories rose further to a nearly two-year high of 3,225,424 bags.