Cocoa Sell-Off Deepens as Supply Improves and Demand Growth Remains Limited (16 July 2026)

Cocoa futures came under heavy selling pressure on Thursday, with both New York and London markets posting sharp losses. New York September futures closed at 5,441 USD/tonne, down 8.03% (-475 USD) from Wednesday’s close of 5,916 USD/tonne. The contract opened at 5,949 USD/tonne and briefly reached an intraday high of 6,013 USD/tonne before selling accelerated, driving prices to a low of 5,309 USD/tonne. Although futures recovered modestly during the final hours of trading, the market remained well below the previous day’s close. London September futures also weakened sharply, falling 9.10% (-396 GBP) from 4,354 GBP/tonne to close at 3,958 GBP/tonne. Selling pressure persisted throughout the session, pushing the contract to an intraday low of 3,949 GBP/tonne and below the psychological £4,000/tonne level before it closed near the session low.

Thursday’s sharp decline appears to have reflected the broader supply and demand balance more than the headline year-on-year increases in regional grindings. Reported ICE warehouse stocks in the United States and Europe have risen rapidly, pointing to a marked improvement in exchange-visible bean availability. Although these inventories do not represent total global cocoa stocks, their continued rebuilding has reduced concerns about immediate physical tightness. At the same time, combined second-quarter grindings across Europe, Asia, North America and Ivory Coast totaled 811,671 tonnes, virtually unchanged from 813,485 tonnes in the first quarter. The combination of rising exchange inventories and flat quarter-on-quarter processing likely reinforced the perception that near-term supply availability is improving faster than demand.

First-half grindings were 2.63% higher year-on-year, but this increase came against a particularly weak 2025 comparison base. Total grindings across the four regions fell to 3.113 million tonnes in 2025, the lowest annual level since 2017. If the current first-half growth rate were maintained through the remainder of the year, full-year processing would reach approximately 3.20 million tonnes in 2026. This would represent only a modest recovery and would leave annual grindings below every year recorded between 2019 and 2024.

However, the supply outlook remains highly weather-sensitive and could change rapidly. Ousmane Attai Ouedraogo noted that early field assessments place Côte d’Ivoire’s 2026/27 cocoa production at between 1.65 million and 1.70 million tonnes, below the country’s strongest recent harvests. Despite generally favourable rainfall, he identified tree health, pests and diseases, ageing plantations and weather conditions over the coming weeks as key risks to the crop outlook. He cautioned: “With two months remaining before the start of the new season, several factors could still cause the estimates to move either upward or downward.”

A strong El Niño is expected to develop during the second half of 2026, increasing the risk of disrupted rainfall, higher temperatures and stronger dry-season winds across West Africa. If this results in a severe or prolonged Harmattan, dry and dusty conditions could reduce soil moisture, stress cocoa trees and compromise pod development during the later stages of the 2026/27 main crop. The current rebuilding of exchange inventories should therefore not be interpreted as evidence that longer-term supply risks have disappeared.

Global Cocoa Grindings

The release of second-quarter cocoa grinding data from Europe, Asia and North America highlighted an increasingly uneven distribution of global cocoa processing activity. While Europe remained under pressure, processors in Asia, North America and Ivory Coast reported solid year-on-year growth, underscoring the continued shift in where cocoa is processed.

Combined grindings across the four reporting regions reached 811,671 tonnes during the second quarter, up 9.95% from 738,245 tonnes in the same period last year.

The figures indicate that weaker European processing activity continues to be offset by stronger grindings elsewhere, particularly in Asia, which recorded another exceptionally strong quarter.

Q2 vs Q1

Compared with the first quarter of 2026, combined grindings across the four regions were essentially unchanged, declining by only 0.22%. This suggests that overall processing activity has stabilized sequentially, even as its regional composition continues to shift

First Half of 2026

Looking beyond the quarterly figures, first-half grindings provide a clearer picture of global cocoa processing activity. Combined grindings across Europe, Asia, North America and Ivory Coast reached 1.63 million tonnes during the first six months of 2026, an increase of 41,652 tonnes (+2.63%) compared with the same period last year.

Asia recorded the strongest year-on-year growth rate at 14.30% and delivered the largest increase in absolute volumes, adding 56,072 tonnes. This more than offset Europe’s decline of 43,023 tonnes (-6.28%). Ivory Coast contributed a further 25,000 tonnes (+8.50%), while North America reported an increase of 3,603 tonnes (+1.70%), although the North American comparison should be interpreted cautiously due to changes in the NCA reporting panel.

Europe

The European Cocoa Association reported second-quarter grindings of 316,366 tonnes, a decline of 4.64% compared with 331,762 tonnes a year earlier. First-half grindings totaled 642,261 tonnes, down 6.28% year-on-year, making Europe the only major processing region covered by the report to record contractions in both quarterly and first-half activity.

Asia

The Cocoa Association of Asia reported second-quarter grindings of 224,646 tonnes, representing a 25.07% increase from the same period in 2025. Processing volumes also edged 0.51% higher compared with the first quarter, bringing first-half grindings to 448,149 tonnes, an increase of 14.30% year-on-year. The results reinforce Asia's position as the fastest-growing cocoa processing region.

North America

The National Confectioners Association (NCA) reported second-quarter cocoa grindings of 109,659 tonnes, up 7.65% from 101,865 tonnes in the second quarter of 2025. First-half reported grindings totaled 215,746 tonnes, compared with 212,143 tonnes during the same period last year, an increase of 1.70%.

However, these year-on-year comparisons should be interpreted with caution. Since the third quarter of 2025, the composition of the NCA reporting panel has changed, with new reporting companies added while others no longer participate. As a result, the published figures are not strictly comparable on a like-for-like basis, meaning the reported increases cannot be attributed solely to changes in underlying cocoa processing activity or chocolate demand.

North American Cocoa Grindings Rise 7.65% in Q2 2026

North American cocoa grindings climbed 7.65% year-on-year to 109,659 tonnes in Q2 2026, signaling resilient chocolate demand.

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Ivory Coast

Domestic cocoa processing in Ivory Coast continued to expand during the second quarter. Grindings reached 161,000 tonnes, compared with 125,000 tonnes in the same quarter of 2025, representing a 28.80% increase. For the first half of the year, processing totaled 319,000 tonnes, up 8.50% from 294,000 tonnes a year earlier, reflecting the country's continued efforts to increase local value addition.

Nigeria

Bloomberg reported on Thursday that Nigerian cocoa exports rose 30% year-on-year in June to 18,922 tonnes.

Nigeria has announced plans to phase out exports of raw cocoa beans and expand domestic processing as part of a broader strategy to retain more value within the country. The policy is intended to support local employment, strengthen foreign currency earnings and reduce reliance on exports of unprocessed agricultural commodities. Nigeria has also joined Côte d’Ivoire, Ghana and Cameroon in a regional alliance aimed at coordinating cocoa policies, expanding processing at origin and improving the bargaining position of producing countries. However, implementation details and a formal timetable for restricting raw bean exports have not yet been clearly established.

Conclusion

The latest grinding data highlight an important structural shift in the global cocoa industry. While Europe remains the world's largest cocoa processing region, its share of global grindings continues to decline as processing capacity expands in Asia and origin countries, particularly Ivory Coast. Consequently, lower European grindings should not automatically be interpreted as an equivalent decline in chocolate consumption, as an increasing proportion of cocoa beans is being processed closer to producing regions and emerging consumer markets.

Next 7 Days: Weather Forecast Across the West African Cocoa Belt

Across most of Côte d’Ivoire and Ghana, cumulative rainfall appears to be broadly in the 10 to 25 mm range, with localized areas, particularly across central and northern producing zones, receiving around 25 to 50 mm. Parts of southern coastal Côte d’Ivoire and southeastern Ghana look comparatively drier, generally near 3 to 10 mm.

Heavier totals are forecast farther west across Guinea, Sierra Leone and Liberia, where accumulations may reach 50 to 100 mm, with isolated pockets above 100 mm. Similar heavier rainfall is indicated over southern Nigeria and western Cameroon, with many areas receiving 25 to 75 mm and localized zones approaching or exceeding 100 mm.

Futures Performance

New York Cocoa

London Cocoa

Cocoa futures recorded steep losses across the curve on 16 July. In New York, September cocoa fell 8.03% to 5,441 USD/tonne, while December declined 7.82% to 5,587 USD/tonne. Deferred contracts also weakened sharply, although the percentage losses moderated slightly further along the curve. London cocoa experienced even heavier selling, with September falling 9.10% to 3,958 GBP/tonne and December losing 8.88% to 4,012 GBP/tonne. The broad decline across both markets indicates that the sell-off was not limited to the nearby contract but affected the entire futures curve.

EFP, EFS and Spread Activity

In New York, total volume was 44,399 contracts, of which 27,123 contracts, or 61.1%, were recorded as spread volume. These are contract legs, not necessarily 27,123 separate spread trades. The largest spread activity appeared in September and December, suggesting that traders were actively adjusting exposure between the nearby contracts. A typical transaction would be to sell September and buy December to roll a position forward, although the exchange report does not reveal whether the market was predominantly buying December against September or doing the reverse. Only 158 contracts were exchanged against physical cocoa positions, while no futures-for-swap activity was reported.

In London, 19,260 of the 33,311 contracts traded, or 57.8%, were spread-related. Activity was particularly strong across the September, December and March maturities, consistent with traders moving exposure along the futures curve or trading changes in the price differences between contract months. EFP activity was negligible at 27 contracts. EFS volume reached 1,850 contracts, including 850 March 2027 contracts and 1,000 July 2027 contracts, indicating that some commercial or institutional participants exchanged over-the-counter swap exposure for exchange-traded futures exposure in those deferred maturities.

US–UK Spread

(Sep Contract)

$5,441 − (£3,956 x 1.348$/£) =$108ton (up from $25ton)

Volume and Open Interest

New York Cocoa (CC)

New York cocoa volume reached 44,399 lots, broadly unchanged from 45,074 lots on the previous day despite the sharp price decline. The latest available open interest, for 15 July, rose to 206,151 contracts, up 1.18% from the previous session and 9.19% since the beginning of July. This indicates that market participation had been expanding ahead of Thursday’s sell-off, although the 16 July open-interest figure is needed to determine whether the decline involved new short positions or liquidation of existing longs.

London Cocoa

London cocoa volume increased 21.11% to 33,311 lots, from 27,504 lots on 15 July, showing that the price decline was accompanied by a clear increase in trading activity. The latest available open interest fell 0.61% to 231,099 contracts and stood 2.13% below its 9 July peak. This suggests some position reduction had already been taking place, but the extent of liquidation during Thursday’s sell-off cannot be confirmed until the 16 July open-interest data are published.

Exchange Trading Volume

The measure is not a complete regional stock-to-grind ratio, as it includes only exchange-certified cocoa held at U.S. and EU delivery ports and excludes commercial inventories outside the ICE warehouse system. North America NCA grindings cover processors across North America, while ICE U.S. certified stocks are stored at U.S. delivery ports. ECA reports bean usage in European countries and London-certified cocoa is held in European and UK delivery locations.

Readers can explore detailed cocoa market datasets, futures statistics, and historical indicators in the CocoaIntel Data Hub:

Data

📊 Grindings 📦 Inventory / Certified Stocks 🚢 Import / Export Flows ⚖️ Stock-to-Grind Ratio 📈 Futures Contracts 🔄 Futures Curve & Spreads 🧠 COT / Positioning 🚚 Port Deliveries 🌧️ Weather Dashboard 🌀 Options & Volatility 📅 Seasonality 📑 Institutional Reports 🗓️ Cocoa Calendar This section is currently under active development. We are building a structured, transparent cocoa market data platform covering futures analytics, certified stocks, positioning

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Tomorrow's Outlook

Friday’s session is likely to begin with a bearish bias following Thursday’s sharp sell-off. However, the September contract found support near the rising 21-day moving average, with prices recovering after reaching an intraday low of 5,309 USD/tonne. This makes the 5,300 to 5,350 USD/tonne area an important near-term support zone.

A sustained break below the 21-day moving average would weaken the broader recovery structure and expose the 5,150 to 5,200 USD/tonne area, followed by the psychological 5,000 USD/tonne level. On the upside, prices would need to recover above 5,550 USD/tonne to ease immediate selling pressure, while a move above 5,650 to 5,750 USD/tonne would provide stronger evidence of stabilization. Until those levels are reclaimed, any rebound is likely to remain corrective.

If you notice any discrepancies in these figures or have extra information, please email [email protected] or leave a comment – corrections and additional insights are always welcome.