Cocoa futures traded around $3,700 per tonne, their lowest level since early May, as rising exchange inventories and an improving supply outlook for the current season weighed on prices.

Key Highlights

  • Cocoa futures traded around $3,700 per tonne, the lowest level since early May.
  • ICE cocoa stocks rose to a 1.75-year high of 2,929,074 bags.
  • Ivory Coast has reported strong arrivals during the 2025/26 season.
  • Early surveys point to smaller crops in Ivory Coast and Ghana for 2026/27.

Cocoa prices slipped to around $3,700 per tonne, marking their lowest level since early May, as growing exchange inventories and a generally favorable supply picture for the current season pressured the market. Data showed ICE-monitored cocoa stocks climbing to a 1.75-year high of 2,929,074 bags, adding to the bearish tone.

Market participants pointed to strong arrivals in Ivory Coast during the 2025/26 season as a key factor behind the inventory build. The country, the world's largest cocoa producer, has seen a broadly favorable outlook for the remainder of its mid-crop, supported by above-average rainfall across key growing regions that has improved soil moisture and supported tree development.

The improved near-term supply picture stands in contrast to early expectations for the 2026/27 season, which appear less favorable. Early surveys are pointing to smaller crops in both Ivory Coast and Ghana, the world's two largest cocoa producers, suggesting that the current period of rising inventories may not persist once the next season's harvest begins.

A key risk factor for the 2026/27 outlook is the potential return of El Niño conditions, which have historically been associated with heat and drought across West Africa. The phenomenon has previously been linked to significant production declines in the region, including notable downturns in 2016 and 2024, both of which contributed to sharp swings in global cocoa prices.

For now, the combination of strong current-season arrivals, rising exchange stocks, and favorable weather for the ongoing mid-crop has pushed cocoa prices to their weakest level in over a month. However, the divergence between the relatively comfortable near-term supply situation and the more uncertain outlook for the following season suggests that cocoa markets could remain volatile as traders weigh the balance between current inventory levels and longer-term production risks tied to weather patterns in West Africa.

For chocolate and confectionery makers such as The Hershey Company (NYSE:HSY) and Mondelez International Inc (NASDAQ:MDLZ), the pullback offers some near-term relief on bean costs after a prolonged stretch of elevated prices pressured margins, though the softer 2026/27 production outlook leaves open the question of how durable that relief will prove.

Buyers and processors in the chocolate and confectionery industries will likely continue to monitor both the pace of arrivals from Ivory Coast and Ghana in the coming weeks, as well as early indications of how the 2026/27 crop is developing, for signals on whether current price levels can be sustained or whether the market could see renewed upward pressure tied to supply concerns for the next season.