Cocoa prices are expected to rise through the end of 2026 as El Niño threatens production in West Africa and removes the current global surplus. A Reuters poll of 11 traders and analysts forecast London cocoa at £4,450 per tonne and New York cocoa at $6,000 per tonne by year-end.
The London forecast is 7.2% above the referenced Friday close and 1.8% above the level recorded at the end of 2025. The New York estimate is 5.7% above the referenced close, but 1.7% below its end-2025 level. Prices had fallen during the first quarter as weak demand allowed stocks to build in West Africa, then gained about 50% during the second quarter.
Weather has returned as the main supply concern. The US Climate Prediction Center assigned an 81% probability to a very strong El Niño during October through December. West Africa produces about 70% of the world’s cocoa beans, so rainfall disruption, disease and reduced farm work can affect the global balance quickly.
The poll’s median estimate placed the 2026 and 2027 season in balance, compared with a 400,000-tonne surplus for 2025 and 2026. Ivory Coast production is forecast to fall from 1.98 million tonnes to 1.8 million tonnes. Ghanaian output is projected to decline from 675,000 tonnes to 580,000 tonnes. Ecuador is forecast to hold near 600,000 tonnes, which would place it ahead of Ghana.
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A balanced market leaves little room for crop disappointment. Any production loss beyond current estimates would require inventories to cover the gap or demand to weaken further. Chocolate manufacturers could face renewed competition for well-fermented beans, certified supply and origin-specific cocoa.
The recent price movement also shows that futures can change faster than physical purchasing plans. A rapid increase in exchange prices affects supplier credit, hedging requirements and the cash needed to maintain positions. Smaller processors may reduce inventories to protect working capital, transferring more delivery risk to short-term purchasing.
Buyers should compare their cocoa coverage with expected production periods in Ivory Coast, Ghana and Ecuador. Longer fixed-price commitments can protect budgets, but suppliers may add larger risk premiums when weather remains uncertain. Index-based contracts can reduce supplier resistance, though they leave buyers exposed to futures volatility.
Product reformulation, package resizing and changes to promotional schedules can reduce cocoa demand, but these actions require long lead times. Procurement teams need to coordinate with production and sales functions before physical availability tightens.
The present surplus offers temporary protection. The forecast shift toward a balanced market means the buffer could disappear during the coming season, leaving chocolate producers more exposed to weather and crop quality in West Africa.
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