Onome Amuge
Cocoa prices soared after it was confirmed that the commodity will rejoin the Bloomberg Commodity Index (BCOM) for the first time in two decades, a move expected to draw billions of dollars in passive fund inflows into the market.
December New York cocoa futures rose 1.5 per cent to $6,130 a tonne, while London cocoa added 1.9 per cent to £4,405 a tonne, extending gains in late trading.
The administrator of the BCOM said cocoa will be added to the index from January 2026 with a 1.7 per cent weighting. Assets tracking the index totalled $109bn at the end of 2024, suggesting potential inflows of about $1.9bn into cocoa futures over the next 80 days, according to estimates by Peak Trading Research.
London cocoa’s rally accelerated as sterling fell to a six-and-a-half-month low, making the sterling-denominated contract cheaper for foreign investors.
ICE-monitored cocoa inventories in US ports fell to a seven-month low of 1.82 million bags on Friday, tightening available supply and adding further support to prices.
Still, crop prospects in West Africa remain mixed. Chocolate maker Mondelez said cocoa pod counts in the region are 7 per cent above the five-year average and materially higher than last year’s crop. Farmers in Côte d’Ivoire (the world’s largest producer) have begun harvesting the main crop and remain optimistic about its quality.
Yet shipments from the country have slowed sharply. Government data released this week showed that farmers delivered 215,219 tonnes of cocoa to ports between October 1 and 26, down 24 per cent from the same period a year earlier.
Ghana, the world’s second-largest producer, has meanwhile reported an increase in arrivals to 50,440 tonnes in the four weeks to September 4, up from roughly 11,000 tonnes a year ago. Nigeria, ranked fifth globally, expects production to fall 11 per cent in the 2025/26 season to 305,000 tonnes, citing adverse weather and lower yields.
Despite the upbeat sentiment from index inclusion, cocoa prices remain under pressure from weak global demand. Fears that high prices and import tariffs could curb chocolate consumption have weighed on the market in recent months, with benchmark contracts touching an eight-month low earlier in October.
In the US, North American chocolate candy sales fell more than 21 per cent in the 13 weeks to September 7 compared with the same period last year, according to data from Circana. Hershey’s chief executive described this year’s Halloween sales as “disappointing”, after the holiday accounted for nearly a fifth of annual US confectionery sales in 2024.
Meanwhile, the Cocoa Association of Asia said regional grindings fell 17 per cent year-on-year in the third quarter to a nine-year low of 183,413 tonnes. In Europe, grindings were down 4.8 per cent to 337,353 tonnes, the weakest third-quarter level in a decade. Only North America posted a gain, up 3.2 per cent to 112,784 tonnes, though analysts cautioned that the increase reflected expanded reporting coverage rather than a genuine rise in consumption.
Analysts expect cocoa prices to remain volatile into year-end, with index-related inflows offset by subdued consumer demand and uneven supply conditions across West Africa.
“Inclusion in the BCOM index will add liquidity and stability in the near term. But without stronger grind data or evidence of sustained consumer demand, the rally may prove short-lived,”said an analyst at Peak Trading Research.
