Global cocoa prices edged lower on Friday as a stronger U.S. dollar and improving weather conditions across West Africa weighed on sentiment, reinforcing expectations of stronger crop yields in the world’s largest cocoa-producing region.
The rally in the U.S. dollar index to a three-and-a-half-month high made dollar-denominated commodities more expensive for international buyers, exerting downward pressure on cocoa futures.
On the Intercontinental Exchange (ICE), May New York cocoa futures fell by 33 points, or 1.0 per cent, while May London cocoa futures declined by 6 points, or 0.25 percent.
Market sentiment has also been shaped by improved rainfall forecasts across West Africa, the region that accounts for the majority of global cocoa supply.
Weather forecaster Vaisala said rainfall is expected to continue across most parts of West Africa into next week, a development that could support cocoa crop flowering and improve yield prospects.
Favourable weather conditions typically signal stronger harvests, which can increase supply and weigh on global prices.
Additional pressure on cocoa prices has come from rising exchange inventories.
Cocoa stockpiles monitored by ICE rose to a seven-month high of 2,251,404 bags on Thursday, indicating improved supply availability in the market.
Higher inventories often signal adequate supply conditions, which can dampen bullish sentiment among traders.
Despite the latest decline, cocoa prices have shown periods of strength in recent sessions.
New York cocoa futures rallied to a three-week high earlier in the week after a Reuters report indicated that local grinders had purchased more than 400,000 metric tonnes of Ivory Coast cocoa export contracts within ten days of the resumption of purchases for the country’s mid-year crop.
The increase in buying activity highlighted continued demand for beans from the world’s largest cocoa producer.
Some support for cocoa prices has also emerged from rising global shipping costs linked to geopolitical tensions in the Middle East.
The closure of the Strait of Hormuz has pushed up global shipping rates, insurance premiums and fuel costs, raising the cost of transporting commodities including cocoa.
These higher logistics costs ultimately increase import prices for cocoa buyers and can lend support to futures prices.
Meanwhile, slowing cocoa deliveries from Ivory Coast ports have also provided some support to the market.
Cumulative data released earlier in the week showed that farmers in Ivory Coast shipped 1.35 million metric tonnes of cocoa to ports between October 1, 2025 and March 1, 2026, representing a decline of 3.6 per cent from the 1.40 million tonnes delivered during the same period a year earlier.
The slowdown indicates tighter supply conditions in the short term, even as production outlooks remain uncertain.
However, weak demand in the global chocolate market continues to weigh on cocoa prices.
Consumers have increasingly resisted high chocolate prices after the surge in cocoa costs over the past year, prompting manufacturers to scale back purchases.
Barry Callebaut AG, the world’s largest bulk chocolate producer, reported a 22 percent decline in sales volume in its cocoa division for the quarter ending November 30, citing weak market demand and a strategic shift toward higher-margin product segments.
Adding further pressure on prices, exports from Nigeria, the world’s fifth-largest cocoa producer, have increased.
Data reported earlier this year showed Nigerian cocoa exports rose 17 percent year-on-year in December to 54,799 metric tonnes.
However, Nigeria’s Cocoa Association expects the country’s production to decline by around 11 per cent in the 2025/26 season to about 305,000 tonnes, down from an estimated 344,000 tonnes in the previous crop year.
Looking ahead, forecasts for global cocoa supply remain mixed.
Ivory Coast authorities have projected that the country’s cocoa production could fall by 10.8 per cent in the 2025/26 season to 1.65 million tonnes, down from 1.85 million tonnes in 2024/25.
Meanwhile, Rabobank recently reduced its forecast for the global cocoa surplus in the 2025/26 season to 250,000 tonnes, down from an earlier estimate of 328,000 tonnes.
However, other projections point towards a more comfortable supply outlook.
The International Cocoa Organization (ICCO) earlier this month raised its estimate for the global cocoa surplus in the 2024/25 season to 75,000 tonnes, up from 49,000 tonnes previously, marking the first supply surplus in four years.
The ICCO also estimated global cocoa production for the 2024/25 season would rise by 8.4 percent year-on-year to 4.7 million tonnes.
Commodity research firm StoneX expects global cocoa markets to remain in surplus over the coming years, forecasting an excess supply of 287,000 tonnes in the 2025/26 season and 267,000 tonnes in 2026/27.
