Cocoa Rises as West African Crop Risks Intensify

Cocoa futures rose above $5,200 a tonne, pulling away from four-month lows hit on November 10, as supply concerns in top grower Ivory Coast intensified. The country's national weather agency (Sodexam) warned that cocoa production could fall between 21% and 25% in the 2026/27 season due to an exceptionally strong El Niño event. Annual rainfall is expected to decline by 10%–27%, shortening the rainy season and extending dry periods. Near-term supply flows are also facing disruption, as heavy rains have reportedly damaged roads in Ivory Coast, hampering bean deliveries to collection centres. Port arrivals remain well below year-ago levels, although dealers suggested that increased smuggling into neighbouring countries may partly explain the decline. However, subdued chocolate demand has contributed to a build-up in exchange inventories. ICE-monitored cocoa stocks have been rising since the start of the year, recently reaching a fresh 2.5-year high of 3,751,670 bags.

Cocoa futures eased further to around $4,700 a tonne, reaching their lowest since June 23, as rising inventories eased supply concerns. ICE cocoa inventories have been rising since the start of the year, recently reaching a fresh 2.5-year high of 3,751,670 bags. Meanwhile, the market continued to closely monitor weather conditions in the top cocoa-growing region of West Africa. In top producer Ivory Coast, October rainfall was irregular amid the influence of El Niño, arriving late and in insufficient amounts to support flowering and fruit development. Reuters, citing cocoa industry technicians and exporters, indicated that Ivory Coast's 2026/27 mid-crop harvest could plunge 42–50% yoy to 300,000–350,000 tonne. There are fears that Harmattan winds in December and January, coupled with the dry season lasting until March, will damage flowers and newly formed fruits. Meanwhile, hotter and drier conditions in neighbouring Ghana and Nigeria also threatened crop development.

Cocoa futures hovered around $5,400 a tonne, holding close to their lowest since early October, pressured by a sustained increase in ICE inventories. The volume of cocoa held in ICE-monitored warehouses has grown throughout the year, reaching a 2.5-year high of 3,688,949 bags by October 29. Meanwhile, farmers in Ivory Coast, the world's largest cocoa producer, reported that despite below-average rainfall across most growing regions, conditions remained adequate to support the current September-to-February main crop. The outlook for the broader 2026/27 season, however, is less encouraging. StoneX projects global production to decline by 9.6% to 4.74 million tonnes, potentially turning a 494,000-tonne surplus in 2025/26 into a 64,000-tonne deficit. Output is expected to contract across several major producers, including Ivory Coast, Ghana, Ecuador and Indonesia, amid weather disruptions associated with El Niño.