Deficit or Surplus? What to Expect for the 2025/26 Cocoa Balance

The cocoa market is entering the 2025/26 season under a cloud of mixed signals, and much of the public narrative remains confused. On one side, official projections still reference a potential surplus based on falling grindings and expectations of improved supply outside West Africa. On the other, traders on the ground, Ivorian officials, and exporters all point to continuing structural deterioration at origin. To understand whether the year ends in deficit or surplus, it is necessary to strip away the noise and rebuild the global balance from the roots: origin behaviour, demand mechanics, certified stock movements, Latin American expansion, and weather risks. When these pieces are combined, the picture becomes clear. The market is not moving toward surplus; it is drifting deeper into deficit territory.

A central misunderstanding is the interpretation of falling grindings. Grind declines over the past year have been widely interpreted as proof of falling chocolate demand, but demand has not collapsed. What has collapsed is grinder profitability. Bean prices surged, quality deteriorated, extraction ratios fell, and many grinders were forced to run below capacity or draw down inventory rather than purchase high-priced, low-quality beans. This is operational rationing, not a loss of end-consumer demand. Global chocolate consumption has remained resilient, even as processors adjusted throughput to protect margins. Treating lower grind volumes as evidence of weak demand leads to the wrong conclusion: that the world suddenly has “too much cocoa.” It doesn’t.

Certified stocks tell a second, deeper story. Exchange inventories continue to decline, with US stocks falling to 1,738,691 bags and UK stocks to 546,719. The critical point is that not all certified stocks are usable. A meaningful share consists of mid-crop beans with lower fat content, older lots with diminished quality, or stock that does not match industrial specifications. In previous years, surplus cocoa from Côte d’Ivoire quietly replenished these stocks. But this cushion has vanished. With origin supply tightening and quality problems widespread, certified stocks have become a declining buffer, not an expanding safety margin. Futures prices falling while exchange stocks shrink is fundamentally inconsistent—unless the futures market is mispricing physical tightness.

Weather adds a layer of risk that most price forecasts are ignoring. The 2025/26 season begins with soil moisture already below seasonal norms across central Côte d’Ivoire and Ghana. Heavy flowering this year increases vulnerability, not safety, because flower abundance leads to higher cherelle wilt under dry conditions. Early Harmattan pulses have carried high dust loads, reducing photosynthesis and accelerating moisture loss. Cooler-than-normal night temperatures further stress trees weakened by disease, aging, and low fertilizer use. Historically, Harmattan severity alone can swing West African output by 10% to 20%, yet current futures pricing assumes no weather risk at all.

Latin America is frequently invoked as the savior, but this too is overstated. Brazil produced roughly 200–220 thousand tonnes and may add 20–30 thousand tonnes at best. Ecuador is growing rapidly and has already set export records. But the meaningful jump toward 650–700 thousand tonnes is still a multi-year trajectory. Colombia, Peru, and the Dominican Republic are improving, but their combined impact remains marginal. Realistically, Latin America can contribute an additional 60–90 thousand tonnes in 2025/26—not nearly enough to counteract a potential 300–500 thousand tonne hole in West Africa.

To anchor these dynamics, we can model the global production balance using ICCO’s 2024/25 season as a baseline. The starting point is roughly 4.84 million tonnes of global production, with West Africa contributing about 3.39 million tonnes and the rest of world contributing 1.45 million tonnes. Grindings in 2024/25 are estimated around 4.65 million tonnes. To project 2025/26, we apply realistic origin shocks drawn from official statements and trade reporting.

Three supply scenarios capture the range of likely outcomes. The conservative scenario assumes West Africa declines by 8% and the rest of the world grows by 3%. The base scenario reflects a 12% West African decline, consistent with Côte d’Ivoire’s expectation of a 30% drop in arrivals between January and March, a 25–30% drop in the mid-crop, and Ghana’s ongoing structural weakness. The severe scenario reflects an 18% decline, appropriate for a strong Harmattan combined with quality losses and reduced cross-border inflows.

Global Production Model for 2025/26

Demand assumptions must also be realistic. Grindings may remain depressed operationally, but true consumption remains intact. A plausible range is between 4.62 and 4.72 million tonnes, depending on how quickly grinders restore throughput or adjust recipes.

Demand Model for 2025/26

Subtracting grindings from production yields the projected global balance.

Global Cocoa Balance 2025/26 (Production – Grindings)

These numbers reveal the truth: the only scenario that avoids a deficit is the most optimistic one, and even that is effectively flat. Any mid-crop weakness, any Harmattan intensification, any further loss of quality, or any delay in Ghana’s recovery immediately pushes the balance deeper into deficit territory. And critically, none of these risks are speculative—they are already happening on the ground.

Taking all of this together, the likeliest outcome for 2025/26 is a global cocoa deficit in the range of 200,000 to 400,000 tonnes, with risk skewed toward the upper end if Harmattan conditions worsen. Latin American growth cannot fill this gap. Certified stocks are falling. Quality is deteriorating. Africa is signaling distress through both its production numbers and its marketing behavior. And demand, despite operational churn, remains intact. The futures market may continue to swing violently in the short term, but structurally it is mispricing tightness. When the market internalizes the real size of the supply hole, prices will adjust—just as they did earlier in 2024.