US Cocoa Futures (COCOA-F) increased by 2.10% to $6262.5 on September 4, cutting its weekly losses. This surge was primarily driven by renewed market focus on tightening supply expectations for the upcoming 2026/27 West African main crop. Concerns regarding poor pod development, below-average cherelle formation, and persistent black pod disease risk in key growing regions like Côte d'Ivoire and Ghana re-emerged as significant market catalysts. These fundamental concerns prompted downward revisions to global surplus estimates by major agricultural research houses, encouraging institutional investors to re-establish long positions.
Adding to the bullish sentiment, Guan Chong Bhd, Asia's largest cocoa processor, anticipates a global cocoa market deficit of 300,000 to 400,000 tonnes in the 2026-27 season, contrasting with a surplus of approximately 100,000 tonnes in the prior year. This expected deficit is attributed to the strengthening El Niño phenomenon threatening production in key growing regions. Ghana, the world's second-largest cocoa producer, faces a potential production drop of more than one-third in the 2026-2027 season, with projections between 470,000-620,000 tons, down from roughly 760,000 tons in the previous season. The intensifying El Niño is expected to bring drier weather, further suppressing yields.
Despite these supply concerns, cocoa prices experienced downward pressure on September 3 and 4 due to signs of ample current supplies. The Ivory Coast, the world's largest cocoa producer, shipped 2.14 million metric tons of cocoa to ports in the current marketing year (October 1, 2025, through August 30, 2026), an increase of 19% from the same period a year ago. Additionally, ICE cocoa inventories rose to a 2-year high of over 3.41 million bags on Tuesday. Barry Callebaut AG, the world's biggest cocoa processor, stated that the global cocoa market is well supplied, making it better prepared for risks than during the 2023/24 El Niño event. However, analysts like StoneX and Transgraph Consulting have cut their 2026/27 global cocoa surplus estimates, with StoneX reducing its forecast to 25,000 metric tons from 149,000 metric tons, and Transgraph to 80,000 metric tons from 415,000 metric tons, primarily citing risks to the West African crop from El Niño.
