December ICE NY cocoa (CCZ25) on Monday closed down -26 (-0.44%), and December ICE London cocoa #7 (CAZ25) closed up +23 (+0.56%).
Cocoa prices on Monday settled mixed. Prices extended their two-month-long decline on Monday, with NY cocoa falling to a 20-month nearest-futures low and London cocoa posting a 20.5-month nearest-futures low. Cocoa prices remain under pressure after the governments of the Ivory Coast and Ghana recently boosted the amount they pay farmers for their cocoa beans, which is expected to increase sales and cocoa supplies. Some mild short covering by funds lifted cocoa prices off their lows on Monday, with London cocoa moving into positive territory.
Cocoa prices have also been under pressure over the past two months amid fears that high cocoa prices and tariffs could dampen chocolate demand. Q3 global cocoa grinding numbers are expected to be released later this week and are expected to show that cocoa demand remains constrained. Chocolate maker Lindt & Sprüngli AG lowered its margin guidance for the year in July due to a larger-than-expected decline in first-half chocolate sales. Additionally, chocolate maker Barry Callebaut AG reduced its sales volume guidance for a second time in three months in July, citing persistently high cocoa prices. The company projects a decline in full-year sales volume and reported a -9.5% drop in its sales volume for the March-May period, the biggest quarterly decline in a decade.
The outlook for an improved cocoa crop in the Ivory Coast this year is also bearish for prices. Chocolate maker Mondelez recently said that the latest cocoa pod count in West Africa is 7% above the five-year average and “materially higher” than last year’s crop. The harvest of the Ivory Coast’s main crop has just begun, and farmers are optimistic about the quality of the crop.
Expectations of abundant global cocoa supplies are hammering cocoa prices. Cocoa deliveries in Ghana have surged, weighing on prices. Cocoa arrivals to ports in Ghana in the four weeks ending September 4 reached 50,440 MT compared to about 11,000 MT delivered in the same period in 2024. Ghana is the world’s second-largest producer of cocoa.
An excessive sort position by funds could exacerbate any short covering rally as funds boosted their net-short positions in London cocoa by 5,060 to 10,771 in the week ended October 7, the largest short position in more than three years, according to last Friday’s weekly Commitment of Traders (COT) data. The US government shutdown has delayed the release of figures for NY cocoa positioning.
Tighter cocoa inventories are supportive for prices after ICE-monitored cocoa inventories held in US ports fell to a 5.75-month low of 1,894,850 bags last Friday.
Cocoa has some support from a slowdown in the pace of cocoa exports from the Ivory Coast, the world’s largest cocoa producer. Monday’s government data showed that Ivory Coast farmers shipped 48,753 MT of cocoa to ports this marketing year from October 1-11, compared with 100,264 MT in the same period a year ago.
Quality concerns regarding the Ivory Coast’s mid-crop cocoa are supportive of prices. According to Rabobank, the poor quality of the Ivory Coast’s mid-crop is partly attributed to late-arriving rain in the region, which limited crop growth. The mid-crop is the smaller of the two annual cocoa harvests, which typically starts in April and ends in September. The average estimate for this year’s Ivory Coast mid-crop is 400,000 MT, down -9% from last year’s 440,000 MT.
Another supportive factor for cocoa is the smaller cocoa production in Nigeria, the world’s fifth-largest cocoa producer. Nigeria’s Cocoa Association projects Nigeria’s 2025/26 cocoa production will fall -11% y/y to 305,000 MT from a projected 344,000 MT for the 2024/25 crop year. In related news, Nigeria reported that its July cocoa exports fell -22% y/y to 13,579 MT.
