Cocoa Falls Again as ICE Inventories Hit 2.25-Year High

Cocoa futures settled sharply lower for a second session on Wednesday, with December ICE New York cocoa (CCZ26) closing down 118 points, or 2.07%, and December ICE London cocoa #7 (CAZ26) closing down 57 points, or 1.35%, according to Nasdaq.

The selling pressure was tied to rising exchange stockpiles and softer readings on demand. ICE cocoa inventories climbed to a 2.25-year high of 3,549,555 bags on Wednesday, a sign that physical supply is not scarce.

Also read: Cocoa Climbs Second Day as West Africa Weather Threatens Crops

Key facts

• December ICE New York cocoa closed down 118 points (2.07%); December ICE London cocoa #7 closed down 57 points (1.35%) on Wednesday.
• ICE cocoa inventories rose to a 2.25-year high of 3,549,555 bags.
• Cargill, the world’s second-largest cocoa processor, reported mark-to-market losses on cocoa for the quarter ended August 31.
• Lindt & Sprungli cut its 2026 organic sales growth outlook to 0% to 2% from 4% to 6% and lowered chocolate prices for a second time this year.

Demand signals and a shrinking cocoa surplus

The bearish case built through the week. Nasdaq reported that Cargill disclosed mark-to-market losses on cocoa for the quarter ended August 31, suggesting the processor had difficulty passing higher costs through to buyers. Chocolate maker Lindt & Sprungli reduced prices again and trimmed its 2026 organic sales growth guidance to a range of 0% to 2%, down from 4% to 6%, citing subdued consumer sentiment.

Supply data has reinforced the trend. Cumulative Ivory Coast shipments reached 2.18 MMT in the marketing year that ran from October 1, 2025 through September 27, 2026, up 19.8% from the prior-year period. The Ivory Coast regulator reported 2.06 MMT harvested from June 2025 to June 2026, a 30% increase from 1.58 MMT a year earlier.

Also read: Dollar Slump to 5-Month Low Lifts Cocoa Futures, But Oversupply Looms

Against that, several analysts expect the balance to tighten. StoneX cut its 2026/27 global surplus estimate to 25,000 MT from 149,000 MT in April, and Transgraph Consulting projected the surplus shrinking to 80,000 metric tons from 415,000 MT, with production falling to 4.87 MMT from 5.11 MMT. Early Ivory Coast crop surveys point to below-average cherelle formation and an average estimate of 1.8 MMT, down 18% from about 2.2 MMT, while Ghana’s Cocoa Board put the 2026/27 crop at 650,000 MT, 13% below 750,000 MT. Ghana’s COCOBOD warned production could fall to 450,000 MT to 550,000 MT.

Why it matters

For chocolate makers and food manufacturers, weaker futures ease the input-cost pressure that squeezed margins over the past two years and partly explains Lindt’s second price cut this year. For traders, the market is caught between heavy near-term deliveries into exchange warehouses and forecasts of a smaller West African harvest. The Q2 grind data reflects that split: European cocoa grindings fell 4.6% to 316,366 MT, yet North American grindings rose 7.7% to 109,659 MT and Asian grindings climbed 25% to 224,646 MT.

What to watch

Black pod disease driven by cloudy weather and limited sunshine in Ivory Coast and Ghana is a quality risk for the harvest that began this month. Further El Niño development, which the US Climate Prediction Center expects to be among the strongest in more than 75 years, would bring warmer, drier conditions to West Africa. This article is not financial advice and commodity markets are volatile and uncertain.

Written by

Benjamin

Benjamin Carter covers business, finance, and the stock market for StockPil, focusing on the trends and data that matter to everyday investors.

Source: Nasdaq