Cocoa Prices Jump on Dry Weather Concerns for West Africa

July 25, 2025 / L'officiel Lifestyle /

Bar of chocolate by Karandaev via iStock

September ICE NY cocoa (CCU25) today is up +198 (+2.44%), and September ICE London cocoa #7 (CAU25) is up +125 (+2.34%).

Cocoa prices today are sharply higher due to concerns about dry weather in West Africa. According to the European Centre for Medium-Range Weather Forecasts, rainfall in the Ivory Coast and Ghana this season remains below the 30-year average, and combined with high temperatures, risks hurting cocoa pod development for the main crop harvest that starts in October.

Cocoa prices posted 2-week highs Thursday on concerns that a slowdown in the pace of Ivory Coast cocoa exports will tighten global supplies. Monday’s government data showed that Ivory Coast farmers shipped 1.74 MMT of cocoa to ports this marketing year from October 1 to July 20, up +6.1% from last year but down from the much larger +35% increase seen in December.

A significant short position by commodity funds in London cocoa futures raises the potential for short covering. Last Friday, ICE Futures Europe reported that funds boosted their net-short London cocoa positions by 1,010 to 6,361 short positions the week ended July 15, the most in more than two years.

Concerns over tepid chocolate demand are bearish for cocoa prices. On Tuesday, chocolate maker Lindt & Spruengli AG lowered its margin guidance for the year due to a larger-than-expected decline in first-half chocolate sales. Also, chocolate maker Barry Callebaut AG reduced its sales volume guidance earlier this month for a second time in three months, citing persistently high cocoa prices. The company projects a decline in full-year sales volume and reported a -9.5% drop in its sales volume for the March-May period, the largest quarterly decline in a decade.

Cocoa prices sold off last week, with NY cocoa sinking to an 8-month nearest-futures low last Thursday and London cocoa slumping to a 17-month nearest-futures low. Weakness in global cocoa demand has hammered prices. The European Cocoa Association reported last Thursday that Q2 European cocoa grindings fell by -7.2% y/y to 331,762 MT, a bigger decline than expectations of -5% y/y. Also, the Cocoa Association of Asia reported that Q2 Asian cocoa grindings fell -16.3% y/y to 176,644 MT, the smallest amount for a Q2 in 8 years. North American Q2 cocoa grindings fell -2.8% y/y to 101,865 MT, which was a smaller decline than the declines seen in Asia and Europe.

In a bearish development, ICE-monitored cocoa inventories held in US ports reached a 10.5-month high of 2,368,141 bags on Tuesday.

Higher cocoa production by Ghana is bearish for cocoa prices. On July 1, the Ghana Cocoa Board projected the 2025/26 Ghana cocoa crop would increase by +8.3% y/y to 650,000 from 600,000 MT in 2024/25. Ghana is the world’s second-largest cocoa producer.

Cocoa prices have support from quality concerns regarding the Ivory Coast’s mid-crop cocoa, which is currently being harvested through September. Cocoa processors are complaining about the quality of the crop and have rejected truckloads of Ivory Coast cocoa beans. Processors reported that about 5% to 6% of the mid-crop cocoa in each truckload is of poor quality, compared with 1% during the main crop. According to Rabobank, the poor quality of the Ivory Coast’s mid-crop is partly attributed to late-arriving rain in the region, which limited crop growth. The mid-crop is the smaller of the two annual cocoa harvests, which typically starts in April. The average estimate for this year’s Ivory Coast mid-crop is 400,000 MT, down -9% from last year’s 440,000 MT.

On May 30, the International Cocoa Organization (ICCO) revised its 2023/24 global cocoa deficit to -494,000 MT from a February estimate of -441,000 MT, the largest deficit in over 60 years. ICCO said 2023/24 cocoa production fell by 13.1% y/y to 4.380 MMT. ICCO stated that the 2023/24 global cocoa stocks-to-grindings ratio declined to a 46-year low of 27.0%. Looking ahead to 2024/25, ICCO on February 28 forecasted a global cocoa surplus of 142,000 MT for 2024/25, the first surplus in four years. ICCO also projected that 2024/25 global cocoa production will rise +7.8% y/y to 4.84 MMT.

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

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Cocoa Prices Jump on Dry Weather Concerns for West Africa

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