Cocoa Prices Tumble On Forecast Ghana Output Surge

Cocoa prices fell sharply yesterday to their lowest level in a week, amid expectations of higher production in Ghana, the world's second-largest cocoa producer. The Ghana Cocoa Board announced today that it expects the 2025/2026 cocoa crop to rise 8.3% year-on-year to 650,000 tonnes, up from 600,000 tonnes in the 2024/2025 season.

• The September cocoa contract on ICE Futures New York fell 7.30%, or 660 points.
• The London ICE cocoa contract also declined 4.23%, or 251 points.

Other factors weighing on prices:

• Rising stocks: Since falling to a 21-year low of 1,263,493 bags on 24 January, cocoa stocks at US ports have climbed to a 9.75-month high of 2,363,861 bags on 18 June.
• Slowing supplies from Ivory Coast: Although farmers there shipped 1.698 million tonnes of cocoa from October through 29 June, up 6.8% year-on-year, this growth has slowed compared with the sharp 35% increase recorded in December.
• Heavy rains in Ivory Coast are hampering farmers and affecting the current mid-crop harvest.

Support from weaker Nigerian exports:
In May, cocoa exports from Nigeria, the world's fourth-largest producer, fell 29% year-on-year to 14,110 tonnes.

Weather factors: Despite recent rains in West Africa, drought conditions still cover more than a third of Ghana and Ivory Coast.

Crop quality issues: There have been complaints of poor quality in Ivory Coast's mid-crop, with processors rejecting entire shipments of beans and reporting that around 5% to 6% of the crop is unfit for use, compared with just 1% for the main crop.

Outlook for Ivory Coast's mid-crop:
The mid-crop is expected to reach 400,000 tonnes, down 9% from last year's 440,000 tonnes.

Consumer demand weakening:

• Barry Callebaut cut its annual sales outlook, citing higher prices and uncertainty over tariffs.
• Hershey reported a 14% drop in first-quarter sales and forecast tariff-related costs of between $15 million and $20 million in the second quarter.
• Mondelez noted a decline in sales as consumers cut back on snack spending.

Falling factory demand:

• North American cocoa grindings fell 2.5% in the first quarter.
• European grindings fell 3.7%.
• Asian grindings fell 3.4%.

Historic production deficit:
On 30 May, the International Cocoa Organization (ICCO) revised its estimate of the global cocoa deficit for the 2023/2024 season to 494,000 tonnes, the largest in more than 60 years. Production fell 13.1% to 4.380 million tonnes.

Positive outlook for the coming season:
The ICCO forecast a global surplus of 142,000 tonnes for the 2024/2025 season, the first in four years, with production rising 7.8% to 4.84 million tonnes.