Cocoa crop concerns push futures higher

The cocoa market saw a strong recovery in early August. Following the sharp correction in the second half of July, attention shifted from ample availability in the current season to the outlook for the 2026/27 crop. Concerns about production in West Africa in particular once again added a substantial risk premium. On 3 August, cocoa futures in both London and New York rose by around 10% in a single trading day.The situation has therefore changed considerably compared with two weeks ago. At the end of July, the market was still mainly under pressure from profit-taking, weak European processing figures and greater availability of cocoa beans. Between 9 and 27 July, the price in New York fell by 21% to $5,100 per tonne, while London lost more than 20%. The market has since shifted its focus firmly towards the longer-term outlook.West Africa creates uncertaintyGhana in particular is creating uncertainty. Cocoa regulator COCOBOD expects production there to fall to between 450,000 and 550,000 tonnes in 2026/27, compared with around 750,000 tonnes in the current season. Diseases, ageing plantations and the potential impact of El Niño are important factors. There are concerns in Ivory Coast as well. Below-average rainfall, extensive cloud cover and relatively cool weather could limit the development of the main crop, which starts coming to market from September.At the same time, there is no shortage in the near term. Arrivals at Ivorian ports stood at 1.992 million tonnes up to 9 August, more than 21% higher than a year earlier. Ghana has also harvested a considerably larger crop this season, while ICE stocks have risen to their highest level in two years. This is limiting the scope for further price gains for now.Ample supply curbs pricesThe cocoa market is therefore balancing between two narratives. Ample supply in 2025/26 remains a drag on prices in the near term, while uncertainty surrounding West Africa in 2026/27 is providing support. Weather developments in Ivory Coast and Ghana are therefore likely to be decisive in the coming weeks. Further setbacks could quickly increase the risk premium, but as long as current stocks remain ample, a return to extremely high price levels does not appear imminent.