Cocoa prices are facing renewed volatility, with recent surges in NY cocoa to a 6-month high and London cocoa to a 7-month high. This is attributed to heavy rains in Ivory Coast and Ghana, which have flooded roads, hampered farmer access, and increased the risk of diseases like brown rot and black pod, threatening global supplies. Underlying medium-term support for cocoa prices also stems from the expected El Niño weather pattern, with the US National Oceanic and Atmospheric Administration (NOAA) estimating a 67% chance of a "Super El Niño" this year, which typically brings warmer, drier conditions detrimental to West African cocoa trees.
Adding to the price pressure are initial surveys of the 2026/27 Ivory Coast cocoa crop, indicating below-average cherelle formation and a weak outlook for the main harvest starting in September. Early assessments project an average of 1.8 million metric tons (MMT) for the 2026/27 season, an 18% decrease from the estimated 2.2 MMT in 2025/26. Consultancy Oxford Economics suggests that the full 2026/27 Ivory Coast harvest could fall by roughly 20% due to El Niño and elevated fertilizer prices. Pod counters and major exporters anticipate a 10% drop in the 2026/27 main crop, forecasting 1.35-1.45 MMT from an estimated 1.6 MMT this season, attributing this to excess rains, disease, and insufficient crop care. The recent El Niño, from mid-2023 to mid-2024, saw world cocoa prices almost triple in 2024, and current concerns are mounting about an even stronger impact next season.
Despite the immediate price increases, volatility in cocoa prices has been observed, with prices tumbling last month due to signs of abundant supply. On June 11, Ivory Coast increased its estimate of cocoa reaching ports by over 260,000 metric tons, bringing cumulative shipments to 2.04 MMT for the current marketing year (October 1, 2025, to June 28, 2026), up 20% from the previous year. However, Ivory Coast expects its 2025/26 production to fall by 10.8% year-over-year to 1.65 MMT from 1.85 MMT in 2024/25. StoneX also cut its 2026/27 global cocoa surplus estimate to 149,000 MT from 267,000 MT previously, citing El Niño risks. Meanwhile, Barry Callebaut AG, the world's largest cocoa processor, reported a 5.7% increase in fiscal Q3 sales volumes, marking its first rise in over two years, suggesting a potential recovery in demand, though analysts express concern about future profitability given the widening gap between the company's internal cocoa price assumptions (around 3,000 pounds sterling or $4,023.60 per ton) and the current market price exceeding 4,400 pounds sterling.
