Cocoa prices surged for a second session, with September ICE NY cocoa up 529 points to a two-week high, driven by concerns over Ghana's cocoa production. Ghana's cocoa regulator COCOBOD projected that the 2026/27 crop could fall to between 450,000 and 550,000 metric tons, down from the 750,000 metric tons forecast for 2025/26, due to swollen shoot disease, aging farms, and potential El Niño weather. Additional support came from potential global supply disruptions amid the near standstill of commercial shipping through the Strait of Hormuz and the Red Sea. However, bearish factors include a 20% year-on-year increase in Ivory Coast cocoa shipments to 2.11 million metric tons so far this season and ICE cocoa inventories rising to a two-year high of 3,375,119 bags. On the demand side, second-quarter European cocoa grindings fell 4.6% to 316,366 metric tons, the lowest for a second quarter in six years, while North American grindings unexpectedly rose 7.7% to 109,659 metric tons and Asian grindings jumped 25% to 224,646 metric tons. StoneX cut its 2026/27 global cocoa surplus estimate to 25,000 metric tons from 149,000 metric tons, and Transgraph Consulting forecast the surplus will shrink to 80,000 metric tons from 415,000 metric tons, partly due to an expected production decline to 4.87 million metric tons. Early surveys of the Ivory Coast main crop point to below-average pod formation and an average estimate of 1.8 million metric tons, down 18% from the prior season, though recent surveys show some improvement. Nigeria's cocoa association projects an 11% production decline to 305,000 metric tons in 2025/26, and the US Climate Prediction Center warned that the emerging El Niño could be one of the strongest in over 75 years, threatening West African yields.
Stonex Group IncStoneX cut its global cocoa surplus estimate, indicating tighter supply which is positive for its trading business.
Concerns over Ghana's production and potential supply disruptions boost cocoa prices.