Cocoa Futures at Over 1-Month High

Cocoa futures traded above $5,900 per tonne, holding close to the highest since early July, amid a subdued US dolar and ongoing concerns over the upcoming West African crop. Although the 2025/26 season has seen a substantial recovery in supply amid improved weather, traders are becoming more cautious about the 2026/27 outlook as weather risks increase. A potentially strong El Niño could delay rainfall and extend dry conditions in major producers in West Africa, while hotter and wetter conditions in Ecuador could increase disease risks. Hedgepoint Global Markets now projects the global cocoa surplus to narrow 66% to 111,000 tons in 2026/27, from 325,000 tons this season. Meanwhile, production forecasts for major producers have also been lowered, with Ghana expecting output to fall 13% to 650,000 tons next season, while Ivory Coast’s crop is seen declining by more than 10%.

Cocoa futures rose toward $5,800 per tonne, supported by a weaker US dollar and falling inventories, alongside concerns over the 2026/27 crop outlook. Although the current season has seen a substantial improvement in supply, traders are increasingly pricing in the possibility of tighter conditions next season as weather risks build across West Africa. In Ivory Coast, farmers have warned that plantations need more sunshine following a period of below-average rainfall and cooler temperatures, with continued unfavorable conditions potentially hampering development of the September-to-February main crop. The developing El Niño pattern is adding to production risks, prompting StoneX in late July to cut its estimate for the 2026/27 global cocoa surplus to 25,000 MT from 149,000 MT in April. Limiting the upside, however, COCOBOD’s new financing model has eased concerns that liquidity constraints in Ghana could disrupt cocoa purchases and exports.

Cocoa prices eased to around $5,700 per tonne, leaving the market little changed for the year as traders continued to assess crop prospects and weather risks. Attention remained focused on the outlook for the 2026/27 season, with expectations of lower production potentially helping to rebalance the market following a substantial global surplus in 2025/26. Production forecasts for major growers Ivory Coast and Ghana have already been reduced, while adverse weather is adding to concerns over the next crop. In Ivory Coast, below-average rainfall, overcast conditions and a recent spell of colder weather have raised concerns about the development of the September-to-February main crop, according to farmers. Supply risks are also emerging elsewhere, with estimates suggesting that Ecuador, Peru and Southeast Asia could collectively produce around 100,000 tonnes less cocoa next season.