Cocoa prices sink: Global supply outlook improves, contracts fall

Cocoa futures tumbled on the front months as July ICE New York cocoa (CCN26) fell about 5.6% and July ICE London cocoa (CAN26) dropped roughly 6.5%, sending nearby contracts to two-week lows. The move followed a week of profit-taking and liquidation after recent highs.

The sell-off accelerated after reports that Côte d’Ivoire revised its delivery outlook upward for the 2025/26 season, with market commentary pointing to a 2.0–2.2 million tonne projection and more supportive rainfall patterns in key growing areas. Those developments reduced immediate tightness concerns and encouraged selling among long holders.

Pressure was compounded by rising exchange-tracked stocks and port arrivals data. ICE-certified inventories have increased in recent weeks and shipment tallies from West African ports have shown year-on-year gains for the current marketing year, reinforcing the narrative of a more comfortable near-term supply. These fundamentals translated into technical weakness across the forward curve.

On the demand side, grindings and confectionery sales remain mixed regionally: some large chocolate makers reported resilient consumer demand, while other datasets point to softness in certain markets. Weather risks, notably the potential development of El Niño, remain a key wildcard that could reintroduce downside crop risk later in the year, keeping volatility elevated. Operational issues such as reduced fertilizer purchases by some farmers also add an element of downside risk for future yields.

Market participants say the near-term outlook will hinge on incoming crop reports from West Africa, ICE inventory updates and seasonal weather developments. Analysts note that while improved supply projections have pared some bullish narratives, the market remains sensitive to a potential weather shock that could narrow global balances again, suggesting a continuation of choppy trading conditions.