Cocoa futures are set for a weekly loss, even as the market grapples with expectations of a shrinking global surplus and potential production declines in key West African regions. US Cocoa Futures (COCOA-F) were up 2.10% at $6262.5 on September 4, but still showed a 7-day decline of 5.56%. This rebound was attributed to renewed focus on tightening supply expectations for the upcoming 2026/27 West African main crop, particularly concerns over poor pod development, cherelle formation, and black pod disease in Côte d'Ivoire and Ghana.
Ghana, the world's second-largest cocoa producer, is forecast to see an 18% to 38% drop in output for the 2026-27 season, ranging from 470,000 to 620,000 metric tons, down from 760,000 tons in the previous season. This decline is due to aging trees, disease, and failing pollination. London and New York cocoa prices have already surged approximately 75% to 80% since June, driven by these supply concerns and the anticipation of an El Niño weather phenomenon impacting West Africa.
Adding to the deficit outlook, Guan Chong Bhd, Asia's top cocoa processor, expects a global cocoa deficit of 300,000 to 400,000 metric tons in the 2026-27 season. This contrasts with a surplus of about 100,000 tons a year earlier. Similarly, StoneX cut its 2026/27 global cocoa surplus estimate to 25,000 metric tons from 149,000 metric tons, while Transgraph Consulting projected a shrinkage to 80,000 metric tons from 415,000 metric tons in 2025-26. These projections highlight significant concerns over future supply despite some recent temporary relief from spot arrivals and current ample supplies in other regions.
