December ICE NY cocoa (CCZ26) on Monday closed down -102 (-1.82%), and December ICE London cocoa #7 (CAZ26) closed down -33 (-0.79%).
Cocoa prices fell on Monday as the Brazilian real plunged -9% after President Luiz Inacio Lula da Silva surprised the markets by winning the weekend Brazilian presidential election for a fourth term. The weaker Brazilian real encourages exporters to sell more cocoa, as they can get a higher dollar price for their sales. Brazil is a much smaller player in the cocoa market than West African nations and Ecuador, but it remains the world’s seventh-largest cocoa producer, accounting for around 4-5% of global cocoa production, according to ICCO estimates.
Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis.
Cocoa prices were also undercut by rising ICE cocoa inventories. ICE cocoa inventories have steadily increased since the start of the year, climbing to a 2.5-year high of 3,684,698 bags on Monday.
Cocoa prices have support from reduced Ivory Coast cocoa shipments in October. On Monday, data from the Ivory Coast government showed farmers delivered 44,241 MT of cocoa to ports in the week ended October 25, well below 82,010 MT in the year-earlier week, according to Bloomberg. In the marketing season to date (Oct 1 through Oct 25), Ivory Coast cocoa port arrivals fell by -43% yr/yr to 122,453 MT from the comparable year-earlier figure of 215,219 MT. In the previous 2025/26 marketing year, Ivory Coast port arrivals rose +20% y/y. Bloomberg continues to report Ivory Coast shipments based on the international cocoa marketing year, even though Ivory Coast moved its 2026-27 marketing year forward by a month to start September 1.
In bearish news last Friday, Nigeria’s September cocoa-bean exports rose +33% y/y to 19,343 tons as higher cocoa prices reportedly encouraged exporters to sell.
Recent cocoa demand data has been mixed. The National Confectioners Association reported on October 15 that Q3 North American cocoa grindings unexpectedly fell -2.5% y/y to 109,978 MT, weaker than expectations of no change. However, the Cocoa Association of Asia reported that Q3 Asian cocoa grindings rose by a record +29% y/y to 233,767 MT, well above expectations of +15% y/y. The European Cocoa Association also reported that Q3 European cocoa grindings unexpectedly rose +3.2% to 348,215 MT, versus expectations of a -3.9% y/y decline.
Cocoa prices have underlying medium-term support from future weather concerns. The US Climate Prediction Center said the El Niño weather pattern that emerged across the equatorial Pacific last month will likely be one of the strongest in more than 75 years. An El Niño typically brings warmer, drier conditions to West Africa, reducing soil moisture, stressing cocoa trees, and lowering yields.
Cocoa prices also have underlying support from early surveys of the 2026/27 Ivory Coast cocoa crop, which show below-average cherelle formation on cocoa trees, signaling a weak outlook for the main cocoa harvest, which began this month. Early crop assessments show poor pod development and an average estimate of 1.8 MMT for the season starting in September, down -18% from about 2.2 MMT in 2025/26. Concerns about the quality of this year’s West African cocoa crops stem from cloudy weather and limited sunshine in the Ivory Coast and Ghana, which have allowed black pod disease to spread and reduce cocoa bean quality.
Concern about a smaller cocoa crop from Ghana, the world’s second-largest cocoa producer, is bullish for prices. On August 20, Ghana’s Cocoa Board said that after a field survey of pod counts, it estimates the 2026/27 Ghana cocoa crop will be 650,000 MT, down -13% from 750,000 MT in the 2025/26 crop year.
In a bullish factor, Ghana’s cocoa regulator, COCOBOD, on July 30 projected Ghana’s 2026/27 cocoa production could fall to 450,000 MT to 550,000 MT from 750,000 MT projected for 2025/26 due to the combined effects of swollen shoot disease, aging cocoa farms, and the likelihood of adverse weather from the El Niño weather pattern. However, production is strong for the current marketing year. Ghana’s cocoa board reported on August 26 that 750,000 MT of cocoa has been harvested for the 2025/26 season, which ends at the end of this month, up +25.6% from 597,000 MT in 2024/25.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
Where Are Cocoa Prices Heading in 2027? Why Have Cocoa Prices Recovered? Is Cocoa Heading Back to Pre-2024 Prices? Why Falling Cocoa Prices Are the Ultimate Margin Rocket for Hershey Stock