Cocoa market stabilises as supply recovers, but weather risks linger

After two exceptionally turbulent years, the cocoa market appears to be entering calmer waters in early June 2026. London cocoa futures are trading at around £2,950 per tonne, significantly below the record highs of more than £9,000 per tonne seen in April 2024. However, the market remains vulnerable to weather-related developments, with a potential El Niño event posing a risk to global supply.The main driver behind the recent price decline is improved supply from the major producing countries. In Côte d’Ivoire, which accounts for around 40% of global cocoa production, cocoa arrivals at ports were 2.2% higher at the end of May than a year earlier.Farmers report that the mid-crop harvest (March to August) is developing favourably thanks to adequate rainfall and periods of sunshine. Bean quality is described as good, while yields in July are expected to exceed those of last year.Ecuador also continues to be an important growth factor in the market. The country exported more than 32,000 tonnes of cocoa beans in April, while the total export value of cocoa and cocoa-derived products reached $135.2 million. This further strengthens Ecuador’s position as a rapidly growing supplier alongside West Africa.As a result of the improved supply outlook, cocoa inventories have also started to recover from the exceptionally tight levels seen over the past two years. Rising exchange-monitored stocks indicate that immediate supply concerns have eased, contributing to a more balanced market environment.Warning against excessive optimismDespite the current recovery, Barry Callebaut, the world’s largest cocoa processor, has warned that the market may be overly optimistic about future production prospects. Chief Executive Officer Hein Schumacher stated that El Niño could once again push cocoa prices up significantly if weather conditions negatively affect yields in West Africa.At the same time, Schumacher does not expect prices to rise as dramatically as they did two years ago. The company is closely monitoring above-average rainfall in Ecuador and elevated temperatures across West Africa. The likelihood of an El Niño event developing this year is considered high. According to Schumacher: “Usually, by the end of June or July, you have a much clearer indication of where El Niño is heading.”Another factor influencing the market is demand. The sharp rise in cocoa prices over the past two years has led to weaker chocolate consumption in several markets and lower processing volumes among cocoa grinders. Although demand remains resilient overall, its recovery has been slower than many market participants expected, limiting upward price momentum.For now, the market is focusing primarily on positive supply signals. Higher arrivals from Côte d’Ivoire, strong exports from Ecuador, recovering inventories and a reasonably good mid-crop harvest have reinforced confidence that sufficient cocoa supplies will be available. Combined with softer demand growth, these factors have kept prices relatively low compared with the peaks seen two years ago.Outlook for the months aheadFor the coming months, a trading range of approximately £2,500 to £4,000 per tonne appears realistic, provided weather conditions in West Africa remain favourable. Current market conditions suggest prices are likely to remain closer to the lower end of that range in the absence of significant weather disruptions.The key turning point will come in June and July, when there should be greater clarity on the strength of any El Niño development and its implications for the next cocoa crop cycle. While improved supply and softer demand currently favour market stability, weather developments remain capable of reintroducing substantial volatility during the second half of the year.