West African Harvest Boom Tests Cocoa Market Support as International Weather Patterns Shift Supply Outlook

Weather Patterns Reshape Global Cocoa Supply Dynamics

Recent climatic conditions across West Africa are triggering a major supply recalibration in commodity markets. Cocoa farmers from the Ivory Coast to Ghana have reported optimal growing conditions—a combination of strategic rainfall followed by drying periods has accelerated pod development and harvest preparation. These meteorological patterns, observed across international cocoa-producing regions, have fundamentally altered yield expectations. The Ivory Coast’s main crop harvest has commenced with farmer sentiment turning decidedly optimistic, particularly regarding crop quality as recent dry spells have facilitated proper bean curing.

Production Forecasts Signal Ample Supply Ahead

The magnitude of expected cocoa availability is staggering. Mondelez reported that the latest pod count in West Africa sits 7% above the five-year average and notably exceeds last year’s production levels. Citigroup substantially revised its 2025/26 global cocoa surplus forecast downward to 79,000 MT from a September projection of 134,000 MT—though this remains supportive of ample global supplies. Meanwhile, Rabobank trimmed its surplus estimate for the same period to 250,000 MT from a November forecast of 328,000 MT. Government data confirmed the supply picture: Ivory Coast shipments reached 895,544 MT during the October 1 through December 14 period, representing a marginal 0.2% increase year-over-year.

Market Price Action Reflects Supply Pressures

March ICE NY cocoa traded down 88 points (-1.48%) while March ICE London cocoa declined 48 points (-1.11%), extending weekly losses and pushing NY cocoa to a 1.5-week low. The bearish price trajectory stems directly from supply expansion forecasts. Earlier volatility saw prices plunge to 1.75-year lows amid expectations of a record West African harvest, though recent trading found temporary support when Citigroup cut its global surplus estimate and when news emerged regarding NY cocoa’s inclusion in the Bloomberg Commodity Index beginning January 2026.

Demand Headwinds Compound Price Challenges

Demand-side metrics paint an equally challenging picture for price support. Chocolate maker Hershey’s CEO characterized Halloween 2024 candy sales as “disappointing,” with Halloween representing nearly 18% of annual U.S. candy sales. Regional cocoa grindings data confirmed slackening consumption: Asia’s Q3 grindings fell 17% year-over-year to 183,413 MT (the weakest third quarter in nine years), while Europe’s Q3 grindings declined 4.8% year-over-year to 337,353 MT (the lowest in a decade). North American chocolate candy sales volumes contracted by more than 21% during the 13 weeks ending September 7 compared to the prior year, despite Q3 North American grindings rising 3.2% to 112,784 MT.

Inventory and Technical Support Factors

A contrarian element emerged from ICE-monitored inventories, which fell to a 9-month low of 1,642,801 bags—potentially providing modest price support. Additionally, passive commodity fund flows represent a technical tailwind; market analysts estimate that NY cocoa’s BCOM inclusion could catalyze approximately $2 billion in buying during January’s opening week, attracting index-tracking capital.

African Production Variability and Regulatory Shifts

Nigeria, the world’s fifth-largest cocoa producer, projects a concerning decline: 2025/26 production is expected to fall 11% year-over-year to 305,000 MT from 344,000 MT. This negative factor provides limited offset to West African expansion. Conversely, the European Parliament’s November 26 approval of a one-year delay to the EU Deforestation Regulation (EUDR) allows continued agricultural imports from deforestation-affected regions, maintaining pressure on global supply balances and keeping prices range-bound.

Supply Normalization After Historic Stress

The current outlook represents a notable reversal from recent history. The International Cocoa Organization estimated a historic 494,000 MT deficit during 2023/24—the largest in over 60 years—driven by production that collapsed 12.9% to 4.368 MMT. Global stocks-to-grindings ratios reached a 46-year low of 27.0%. The 2024/25 period marked the inflection point: ICCO projected a 49,000 MT surplus (the first in four years) with production rebounding 7.4% to 4.69 MMT, setting the stage for current supply abundance.