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Cocoa prices have surged due to concerns about dry weather in West Africa, particularly in the Ivory Coast and Ghana, which could impact cocoa pod development and lead to tighter global supplies. The European Centre for Medium-Range Weather Forecasts has reported that rainfall in the region remains below the 30-year average, posing a risk to the main crop harvest starting in October.
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The Ivory Coast’s cocoa exports have slowed, with a 6.1% increase in shipments to ports this marketing year, down from a 35% increase in December. Commodity funds have taken a significant short position in London cocoa futures, raising the potential for short covering.
However, concerns over tepid chocolate demand have tempered the price increase. Chocolate makers Lindt & Spruengli AG and Barry Callebaut AG have lowered their margin guidance and sales volume projections due to declining sales.
Weak global cocoa demand has also impacted prices, with European, Asian, and North American cocoa grindings declining year over year. ICE-monitored cocoa inventories in US ports have reached a 10.5-month high.
Despite these challenges, Ghana’s projected 8.3% increase in cocoa production for the 2025/26 season could further impact prices. Quality concerns regarding the Ivory Coast’s mid-crop cocoa have provided some support for prices, with processors reporting poor-quality beans.
The International Cocoa Organisation (ICCO) has revised its global cocoa deficit for 2023/24 to -494,000 MT, citing a 13.1% decline in cocoa production. The organization forecasts a global cocoa surplus of 142,000 MT for 2024/25
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Jonathan Nwokpor
