Onome Amuge

Cocoa prices fell into bearish position, hitting multi-month lows in both London and New York, as favourable weather in West Africa brightened the outlook for the upcoming harvest and chocolate makers flagged weakening demand.

December ICE New York cocoa futures settled 0.25 per cent lower at $6,771 per tonne, while December ICE London cocoa slipped 1.01 per cent to £4,783 per tonne, marking a 2.5-month low. The declines cap six weeks of pressure on the market, which had previously surged to two-month highs on fears of drought across the region.

Beneficial rainfall in Ivory Coast, the world’s top producer, has improved crop conditions ahead of the main harvest season that begins in October. Recent pod counts are 7 per cent above the five-year average, according to Mondelez, the maker of Cadbury and Toblerone, which described the crop outlook as materially higher than last year.

Traders said the shift in weather conditions was prompting farmers and exporters to revise expectations after the driest 60-day spell since 1979 raised concerns over pod development and black pod disease in Ghana and Nigeria.

Signs of faltering global chocolate consumption have added to bearish sentiment. Lindt & Sprüngli cut its margin guidance in July after a sharper-than-expected decline in first-half sales, while Barry Callebaut, the world’s largest cocoa processor, lowered its sales forecast for the second time in three months. The Swiss company reported a 9.5 per cent fall in sales volumes between March and May, its heaviest quarterly drop in a decade.

Analysts warn that persistently high cocoa prices and tariffs are squeezing manufacturers’ margins and curbing appetite, particularly in mature markets. Futures prices remain more than double their long-term average despite the latest pullback.

While the improving outlook for the Ivorian crop has softened prices, tightness in inventories is offering some support. ICE-monitored cocoa stocks in US ports fell to a five-month low of 1.99mn bags this week, according to exchange data.

Export flows from Ivory Coast are also slowing. Government figures show farmers shipped 1.82mn tonnes to ports between October and late September, up 4.6 per cent year on year but well below the 35 per cent rise seen last December.

Quality concerns remain over the country’s smaller mid-crop, which runs from April to September. Rabobank estimates the mid-crop will fall 9 per cent year on year to 400,000 tonnes, blaming late rains for poor bean size and quality.

In Nigeria, the world’s fifth-largest producer, output is expected to contract sharply. The Cocoa Association projects 2025/26 production at 305,000 tonnes, down 11 per cent from the current year, while July exports fell 22 per cent to 13,579 tonnes.

Analysts said the market remained finely balanced. A bumper Ivorian main crop could push futures lower, but structural issues, from smaller harvests in Nigeria to sluggish mid-crop quality and depleted inventories, may limit the downside.

For chocolate makers, however, the more immediate challenge lies in balancing higher costs against price-sensitive consumers. With retail prices already rising sharply, the industry faces the prospect of weaker volumes as consumers trade down or cut back