Cacao price rises significantly towards Christmas

The cacao price has made a significant jump upward in the lead-up to Christmas. While demand is growing, the supply is lower than last year. Nevertheless, the expectation remains that next year's harvests will improve. The Christmas demand for cacao has been noticeable in the market in recent weeks. In London, the price reached its highest point since mid-November on December 12, at the equivalent of $6,093 per ton. This is an increase of 26.9% compared to the low point at the end of November. In New York, the price peaked a day earlier. The price of $6,288 per ton was as much as 27.2% higher than the recent low. Meanwhile, the price has begun to decline slightly. In London, the price fell to the equivalent of $5,847.18, while the price in New York decreased to $5,998. The Christmas demand is clearly providing a strong boost to the cocoa markets. Particularly in the United States, a lot of cacao is consumed. The cocoa stocks monitored by ICE in U.S. ports fell to 1,659,791 bags on Thursday, the lowest level in nearly 9 months. In addition to strong demand, the weak harvest is causing increasing tightness in the market. For instance, the supply in the ports of Ivory Coast has clearly declined. Data from the Ivorian government shows that Ivorian farmers shipped a total of 804,288 tons of cacao to the ports in the new marketing year, from October 1 to December 7. This is a decrease of 1.8% compared to 819,425 tons in the same period a year earlier. Furthermore, there are clear signals that the global surplus is lower than expected. Citigroup has lowered its estimate for the global cacao surplus in the 2025/26 season to 79,000 tons, down from a previous estimate of 134,000 tons in September. This immediately led to higher prices as there was short covering in cacao futures on the futures market. This means that short positions are being repurchased, which realizes the profits. This is a signal that traders believe the bottom has now been reached. Eastern expectations remain strong Although prices are somewhat higher for now, long-term expectations remain favorable. Cacao farmers in Ivory Coast report that a combination of rain and sunshine promotes the flowering of cocoa trees. Farmers in Ghana also indicate that the rainfall is regular and beneficial for the development of the cocoa trees and pods. Cacao farmers in Ivory Coast noted that the cacao trees are doing well and that the recent dry weather helped in drying the harvested beans. Additionally, cacao growers in Ghana reported that favorable weather conditions are leading to rapid development of the cacao fruits. These favorable weather conditions in West Africa continue to feed expectations for better yields. The expectation remains that supply will continue to rise, which still exerts a downward effect on prices.