Cocoa futures prices settled higher on Thursday, March 19, 2026, recovering from early losses as a weaker US dollar prompted short covering in the market. The May ICE NY cocoa contract closed up 2.18%, while the May ICE London cocoa contract rose 2.16%.
Market Reversal Amid Currency Shift
The rally marked a turnaround from earlier pressure driven by an improved supply outlook. Consistent rainfall in key West African growing regions has boosted pod development for cocoa trees in Ivory Coast and Ghana. Furthermore, ICE-monitored cocoa inventories recently climbed to a 7.5-month high, adding to the bearish sentiment that dominated the start of the week.
Analysts noted the dollar’s decline provided a catalyst for buyers. A weaker dollar makes dollar-denominated commodities like cocoa less expensive for holders of other currencies, which can stimulate demand.
Conflicting Supply and Demand Signals
The market continues to grapple with mixed fundamental data. On the supply side, recent purchases by local grinders in Ivory Coast suggested emerging demand following official price cuts for farmers. Both Ghana and Ivory Coast, which together produce over half the world’s cocoa, have significantly reduced the farmgate prices paid to growers for the current season.
Conversely, demand concerns persist. Barry Callebaut AG, the world’s largest bulk chocolate maker, reported a steep 22% decline in sales volume for its cocoa division in the quarter ending November 30. The company cited “negative market demand” as a primary factor.
Regional cocoa grinding data has also pointed to weakness. The European Cocoa Association reported that fourth-quarter 2025 grindings fell 8.3% year-over-year, marking the lowest Q4 total in 12 years. Asian grindings also declined, while North American processing saw only marginal growth.
Logistical and Production Factors
Other factors are providing modest support. The closure of the Strait of Hormuz has increased global shipping and insurance costs, raising expenses for cocoa importers. Slowing deliveries from farms to ports in Ivory Coast have also been noted. Official data showed cumulative shipments for the current marketing year are down 2.8% from the same period last year.
Production forecasts remain mixed. Ivory Coast officials project a 10.8% year-over-year production decline for the 2025/26 season. Rabobank recently reduced its estimate for the global cocoa surplus. However, the International Cocoa Organization (ICCO) raised its surplus estimate for the 2024/25 season, marking the first surplus in four years. StoneX has forecast continued surpluses for the following two seasons.
What’s Next for Cocoa Markets
Traders are now weighing the short-term influence of currency markets against the longer-term backdrop of uncertain demand and variable harvest forecasts. The price cuts to farmers in West Africa aim to stimulate supply but may also affect future planting decisions. Market participants will closely monitor port shipment data from Ivory Coast and Ghana, as well as any shifts in consumer chocolate purchasing, for clearer directional signals.
For real-time commodity data and analysis, visit the Intercontinental Exchange (ICE) or review public filings from major producers. The International Cocoa Organization (ICCO) provides regular statistical updates on global supply and demand.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
