London Cocoa Futures Gain Ground as Ivory Coast Shipments Tighten

March contracts for London cocoa futures (CAH26) climbed 2.61% (+76 points) today, while New York cocoa (CCH26) advanced 0.98% (+41 points), marking a reversal from recent weakness. The recovery in London cocoa futures comes on the heels of reduced cocoa deliveries to Ivorian ports, triggering short-covering activity across the commodity markets. This price surge underscores how supply constraints can rapidly shift market sentiment, even amid broader concerns about global cocoa abundance.

Supply Shifts in Ivory Coast Driving Price Momentum

Farmers in Ivory Coast, the world’s leading cocoa producer, have transported 1.23 million metric tons (MMT) of cocoa to ports since October 1, 2025, through February 1, 2026—a 4.7% decline from the 1.24 MMT delivered during the identical period last year. This contraction in port flows has provided the catalyst for the bounce in London cocoa futures and the broader market rally. Despite this recent improvement in prices, the commodity remains pressured by structural headwinds, with global supplies still elevated relative to demand.

Demand Deterioration Continues to Pressure Markets

Cocoa prices remain under pressure from persistent demand weakness, as elevated chocolate prices have eroded consumer purchasing power. Barry Callebaut AG, the world’s largest bulk chocolate producer, disclosed a 22% quarterly decline in cocoa division sales volume through November 30, attributing the drop to weak market demand and a strategic pivot toward higher-margin product lines.

Grinding data from major consuming regions reinforces the demand malaise. The European Cocoa Association reported an 8.3% year-over-year contraction in Q4 cocoa grindings to 304,470 MT—the lowest Q4 reading in over a decade and a steeper drop than the anticipated 2.9% decrease. Asian cocoa grindings fell 4.8% year-over-year to 197,022 MT, while North American grindings inched up just 0.3% year-over-year to 103,117 MT. The confluence of these declining regional grindings highlights a structural cooling in global cocoa consumption that London cocoa futures prices must eventually reckon with.

Inventory Dynamics Complicate the Price Picture

Cocoa stocks held at ICE-monitored US ports had plunged to a 10.5-month low of 1,626,105 bags on December 26, but have since rebounded to a 2.5-month high of 1,775,219 bags as of late last week. This inventory rebound typically exerts downward pressure on cocoa prices, offsetting some of the bullish sentiment from reduced Ivory Coast shipments. The build in stocks suggests sufficient physical availability despite the tighter port flows, limiting the upside for London cocoa futures in the medium term.

West Africa Harvest Prospects and Global Supply Rebalancing

Tropical weather conditions in West Africa have supported strong pod development, with Mondelez reporting that the latest cocoa pod count exceeds the five-year average by 7% and substantially surpasses last year’s crop. Both Ivory Coast and Ghana are expected to achieve stronger February-March harvests with larger and healthier pods than the prior year. The main harvest in Ivory Coast has already commenced, with local farmers expressing optimism regarding crop quality.

On the broader supply front, tighter cocoa exports from Nigeria, the world’s fifth-largest producer, are providing modest price support. Nigeria’s cocoa exports in November dropped 7% year-over-year to 35,203 MT, and the Cocoa Association of Nigeria forecasts a 11% decline in 2025/26 production to 305,000 MT from an estimated 344,000 MT in 2024/25.

Global Surplus Narrowing Amid Revised Forecasts

The International Cocoa Organization (ICCO) has dramatically narrowed its global cocoa surplus estimate for 2024/25 to just 49,000 MT on November 28, down sharply from a prior forecast of 142,000 MT. The organization simultaneously lowered its 2024/25 global cocoa production estimate to 4.69 MMT from 4.84 MMT. Rabobank revised its 2025/26 global cocoa surplus to 250,000 MT last week, down from a November projection of 328,000 MT, signaling growing confidence that supply-demand balances are tightening.

For context, the ICCO estimated a dramatic 494,000 MT deficit for 2023/24, the largest shortfall in over six decades, after production fell 12.9% year-over-year to 4.368 MMT. The recovery to a modest surplus of 49,000 MT in 2024/25 and the projected 250,000-287,000 MT surplus for 2025/26 represents a meaningful rebalancing, though one that still leaves London cocoa futures vulnerable to demand surprises or regional production disruptions.