Current Market Overview
As of September 29, 2026, ICE cocoa futures have experienced a decline of nearly 4%, following a strong rebound in late August and early September. The market is currently facing downward pressure due to rising inventories and improved supply conditions from the Ivory Coast, which are contributing to a bearish outlook.
Supply Dynamics
ICE cocoa inventories have surged to their highest levels in approximately 2.25 years, reaching 3,452,949 bags. This increase in inventory indicates a greater availability of cocoa in the market, which is negatively impacting prices. Additionally, the Ivory Coast has reported a significant harvest of around 2.06 million metric tons of cocoa from June to the end of August, marking a 30% increase compared to the previous year.
However, the pace of deliveries has shown signs of weakening, with a 45.8% decrease in deliveries from September 1 to 13 compared to the same period last year. This suggests that while the overall season data appears strong, the initial stages of the new cycle may not be as robust.
Market Sentiment and Future Outlook
Barry Callebaut has indicated that the global cocoa market is currently better supplied than during the El Niño-related crisis of 2023/24, suggesting that previous supply tightness has eased. Nevertheless, weather conditions remain a critical factor, with excessive rainfall and cloudy weather in the Ivory Coast and Ghana posing risks of black pod disease and potential reductions in bean quality.
Looking ahead to the 2026/27 season, forecasts for production in the Ivory Coast are estimated at around 1.8 million metric tons, which is lower than the 2.2 million metric tons produced in 2025/26. Ghana's production outlook is also concerning, with estimates ranging from 450,000 to 650,000 metric tons, down from previous projections.
Analysts have adjusted their expectations for the global cocoa surplus, with StoneX reducing its forecast from 149,000 metric tons to 25,000 metric tons, and Transgraph Consulting predicting a decrease from 415,000 metric tons to around 80,000 metric tons for the 2026/27 season.
Demand Trends
Demand signals are mixed, with European cocoa grindings falling by 4.6% year on year in Q2 to 316,366 metric tons, indicating softer industrial demand. In contrast, North American grindings increased by 7.7% to 109,659 metric tons, and Asian grindings surged by 25% to 224,646 metric tons, reflecting stronger demand in those regions.
Conclusion
The cocoa market is currently navigating a complex landscape characterized by improving near-term supply and uncertain medium-term fundamentals. While rising inventories and strong deliveries are exerting downward pressure on prices, weather risks, production outlooks in Ghana, and crop quality concerns remain significant factors that could influence market dynamics in the future.