Cocoa
Cocoa
Price movements (monthly)
Cocoa bean London ICE
Month-on-month Change
Year-on-year Change
- Both London and NY cocoa bean futures fell throughout October on improved weather conditions, though canopy health remains poor and small pod counts were disappointing.
- The wet weather is likely to continue into November based on current forecasts, and industry participants continue to look at weather and crop development over the next month as being the most critical factor that will drive prices.
- The Q3 grindings figures were broadly in line with industry expectations, although North American grindings in particular surprised to the upside, partially based on the inclusion of two new reporting companies which added additional volume.
- News that the ICE NY cocoa futures will be included in the 2026 Bloomberg Commodity Index caused an influx of buying in the early days of November, with the spot price strengthening by about 10% before retracing as additional rainfall was considered beneficial for crop development.
Cocoa
Supply
Expana completed 2 surveys in October in Ivory Coast and Ghana. Rainfall was sporadic in the last week of October and consequently cumulative October rainfall in all regions was below average. The forecast for November shows more rain well above trend, but cumulative rainfall for the year is still lagging.
Despite the improvement in rainfall and soil moisture, canopy conditions in Ivory Coast and Ghana show signs of stress and higher levels of pod wilt following the dry spell several months ago. As a result, small pod counts (chart below) remain well below average.
Recent surveys by Expana’s team on the ground have highlighted that flowering over the past week has started to improve, boosting hopes that next year’s mid-crop might overperform. At this point, a weak tail to the main crop seems guaranteed based on crop conditions. Expana’s Fundamentals team maintains its 25/26 forecasts of 1,750,000 mt in Ivory Coast and 500,000 mt in Ghana.
Cocoa
Price forecast
Several factors suggest upward price momentum heading into Q1 2026, targeting approximately GBP 6,100/MT.
One near-term catalyst is the implementation of the EU Deforestation Regulation (EUDR), which is tightening available volumes for certain buyers. This regulatory constraint creates artificial supply bottlenecks that should provide meaningful upside price risk, regardless of underlying fundamental valuations. The market is already experiencing persistent liquidity challenges, and EUDR compliance requirements will likely exacerbate these conditions. Cocoa futures will be added to the Bloomberg Commodity Index (BCOM) from January 2026, which led to rallies earlier in Q4.
Seasonal patterns strongly support a Q4 rally. Historical data consistently show price increases beginning in late Q3, accelerating through November, and maintaining elevated levels into January. This seasonal dynamic aligns with typical demand patterns in the cocoa market and provides a reliable tailwind for the anticipated move higher.
Q3 grinding data presents a mixed but cautiously optimistic picture. Whilst Asian demand remains soft, American grindings actually increased, potentially influenced by the evolving US tariff regime. This geographic divergence suggests pockets of genuine demand strength that could support higher prices despite broader fundamental weakness. Global speculators maintain a net long stance, and whilst this is declining, it has not yet reached bearish extremes that would signal imminent selling pressure.
The rising fair value range itself provides partial mitigation to the downward pressure from current overvaluation. As the fundamental baseline trends higher, it narrows the valuation gap and reduces the theoretical distance prices must fall to achieve equilibrium. Combined with regulatory tightening and seasonal strength, these factors create credible upside risk into year-end and beyond.
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