ICE New York cocoa futures slipped on the day, with September contract prices falling 0.92% to trade lower after a consolidation session above Tuesday’s 3.5-week lows. In London, September ICE cocoa #7 eased 0.36%, as traders weighed fresh balance-sheet projections against ongoing concerns for West African crop conditions.
Market participants focused on a shift in global supply expectations, along with evidence of continued near-term movement in shipping flows and rising warehouse stocks. That mix left prices lower, but with losses moderated by weather-linked risks for the next main harvest.
Key takeaways
- Price move: September ICE New York cocoa fell 0.92%, while September ICE London cocoa #7 declined 0.36%.
- Catalyst: StoneX cut its 2026/27 global cocoa surplus estimate to 25,000 MT, citing risks from an expected El Niño affecting West African output.
- Bearish counterweight: Ivory Coast port arrivals showed strength, and ICE inventories rose to a 2-year high.
- Implication for investors: The market is balancing tighter forward supply expectations against a still-supplied near-term pipeline and weaker demand signals.
What drove the move
According to StoneX, the projected 2026/27 global cocoa surplus narrowed sharply to 25,000 MT from a forecast of 149,000 MT issued in April. The brokerage linked the revision to elevated risks to the West African cocoa crop, tied to the likelihood of an El Niño pattern developing.
Despite that supportive narrative, cocoa futures remained under pressure over the past two weeks and hit 3.5-week lows on Tuesday. That softer trend was associated with signs pointing to larger global supplies and “suspect” demand, leaving traders more sensitive to inventory and shipping data.
Supply signals: stronger arrivals, higher stocks
Data from the Ivory Coast’s cumulative figures, covering the marketing year from October 1, 2025 through July 26, 2026, showed farmers shipped 2.11 million metric tons of cocoa to ports. The report indicated this was up 21% compared with the same period a year earlier.
In parallel, Bloomberg reported that Nigerian cocoa exports rose 30% year over year in June to 18,922 MT, citing the same period comparison.
Inventory levels also weighed on the market. According to the article, ICE cocoa inventories rose to 3,375,119 bags on Tuesday, a two-year high. Higher warehouse stocks typically pressure futures by signaling more availability than the market had priced in.
Demand updates were mixed
On the demand side, the picture was uneven across regions. According to the European Cocoa Association, Q2 European cocoa grindings fell 4.6% year over year to 316,366 MT. The decline was larger than the 1.5% drop expected and represented the lowest Q2 level in six years.
However, the National Confectioners Association reported that Q2 North American cocoa grindings increased 7.7% year over year to 109,659 MT, surpassing expectations for a 1% year-over-year decline. In Asia, the Cocoa Association of Asia said Q2 Asian grindings rose 25% year over year to 224,646 MT, also above an expected 9% increase.
Crop outlook and weather risk in focus
While near-term supply data pointed to a better pipeline, the article highlighted underlying support tied to early assessments of the 2026/27 Ivory Coast crop. Early surveys referenced below-average cherelle formation on cocoa trees, suggesting a potentially weak main harvest that starts in September. Still, the piece noted that a senior manager at Expana said Thursday’s most recent surveys indicated a substantial improvement in cocoa pod counts versus earlier checks.
Those early crop assessments, as reported, put the season starting in September at an average estimate of 1.8 million metric tons. That would be down 18% from about 2.2 million metric tons in 2025/26, with pod development described as poor in early estimates.
Beyond the near-term crop checks, the weather outlook continued to drive attention. According to the US Climate Prediction Center, the El Niño pattern that emerged across the equatorial Pacific last month is likely to become one of the strongest in more than 75 years. The article said an El Niño typically brings warmer, drier conditions to West Africa, reducing soil moisture and stressing cocoa trees, which can lower yields.
Regional production expectations also supported the supply-tightening narrative. The article cited Nigeria’s Cocoa Association, projecting Nigerian cocoa production in 2025/26 would fall 11% year over year to 305,000 MT, down from a projected 344,000 MT for 2024/25.
Bigger picture: what traders will watch next
With inventories at a two-year high and shipping flows showing strength, cocoa bulls will likely need improving demand confirmation and continued signs that production risk is translating into tighter balances. Investors may focus next on updated crop surveys for the Ivory Coast and further refinements to global surplus estimates, alongside ongoing weather signals for El Niño development.
Additional catalysts could include subsequent monthly and weekly shipping and inventory updates from major origins and exchanges, plus demand reporting from regional cocoa grinding associations as Q3 progresses.
