Global Supply Disruptions Lift Cocoa Prices

May ICE NY cocoa (CCK26) today is up +107 (+3.36%), and May ICE London cocoa #7 (CAK26) is up +76 (+3.18%).

Cocoa prices are climbing today amid concerns over global supply disruptions, after Iran on Saturday said the Strait of Hormuz was closed to shipping following the US refusal to lift a naval blockade on Iranian vessels.   The closure of the Strait of Hormuz is supportive for cocoa prices as it has reduced fertilizer supplies, boosted global shipping rates, insurance costs, and fuel prices, thereby raising cocoa importers' costs.

An excessively short position by funds in New York cocoa could add fuel to any short-covering rally.  Last Friday's weekly Commitment of Traders (COT) report showed funds boosted their short position in NY cocoa by 1,737 net short positions in the week ended April 14 to 18,105, the most in more than 3 years.

Weakness in global cocoa demand is bearish for prices.  The National Confectioners Association reported last Thursday that North American Q1 cocoa grindings fell -3.8% y/y to 106,087 MT.  Also, the European Cocoa Association reported that Q1 European cocoa grindings fell -7.8% y/y to 325,895 MT, a bigger decline than expectations of -6% y/y and the lowest for a Q1 in 17 years.  Conversely, the Cocoa Association of Asia reported that Q1 Asian cocoa grindings unexpectedly rose +5.2% y/y to 223,503 MT, stronger than expectations of a decline of -6.7% y/y.

Weak signs of chocolate demand are bearish for cocoa prices.  Circana reported last Tuesday that chocolate candy sales in North America in the 13 weeks ending March 22 fell -1.3% from the same period a year ago.  Also, Bloomberg Intelligence said that chocolate candy sales during this past Easter holiday, a prime seasonal time for chocolate consumption, fell about 5% from last year.

Ample supplies are also bearish for cocoa prices, as ICE cocoa inventories rose to a 19.75-month high of 2,624,492 bags on Thursday.

Cocoa supplies from the Ivory Coast are ample, a bearish factor for prices.  Today's cumulative data from the Ivory Coast showed that farmers shipped 1.48 MMT of cocoa to ports in the current marketing year (October 1, 2025, through April 19, 2026), unchanged from the same period a year ago.  

Recent rainfall in West Africa has been insufficient to ease drought concerns in the Ivory Coast and Ghana.  According to the African Flood and Drought Monitor, as of March 29, drought conditions blanket more than half of the Ivory Coast and about two-thirds of Ghana.

Last month, Ghana cut the official price it pays its cocoa farmers by nearly 30% for supplies for the 2025/26 growing season, and the Ivory Coast also said it would cut cocoa farmer pay by 57% that would kick in for the mid-crop harvest that started this month.  The Ivory Coast and Ghana produce more than half of the world's cocoa.

Also undercutting cocoa prices are higher exports from Nigeria, the world's fifth-largest cocoa producer.  On February 17, Bloomberg reported that Nigerian Dec cocoa exports rose +17% y/y to 54,799 MT.  Nigeria's Cocoa Association projects that Nigerian cocoa production in 2025/26 will fall by -11% y/y to 305,000 MT, from a projected 344,000 MT for the 2024/25 crop year.  

On the bullish side, the Ivory Coast said its cocoa production in 2025/26 would fall -10.8% y/y to 1.65 MMT from 1.85 MMT in 2024/25.  On February 10, Rabobank cut its 2025/26 global cocoa surplus estimate to 250,000 MT from a November forecast of 328,000 MT.

As a bearish factor, the International Cocoa Organization (ICCO) on March 2 raised its global 2024/25 cocoa surplus estimate to 75,000 MT from 49,000 MT in November, which was the first surplus in four years.  ICCO estimated that global cocoa production in 2024/25 climbed by +8.4% y/y to 4.7 MMT.  Looking ahead, StoneX on January 29 forecasted a global cocoa surplus of 287,000 MT in the 2025/26 season and a 267,000 MT surplus for 2026/27.