London July cocoa futures have risen by approximately 10% over the past two weeks, driven by FMCG buying tied to El Niño headlines, despite the 2025/26 season being forecast to deliver a record surplus of 550,000–600,000 tonnes.

Compared to Friday April 24, London July futures finished up GBP 126 or 4.9% week on week, and up GBP 261 or 10.8% versus two weeks ago. New York July gained USD 316 or 9.6% over the two-week period.

The main driver is FMCG buying behaviour rather than fundamentals. Procurement departments scarred by the previous cocoa crisis appear to be hedging aggressively in response to El Niño headlines, including some references to a “Super El Niño” scenario. NOAA’s ENSO outlook puts El Niño emergence at 61% probability for May–July 2026, with neutral conditions favoured through April–June.

Speculative positioning continues to support the bullish case. The combined Managed Money position in London and New York increased by 3,200 lots to (53,700) lots short as of the April 28 cutoff, leaving meaningful room for short covering.

Demand fundamentals are less clear cut. Recent quarterly earnings from FMCG companies and Barry Callebaut were positive on profitability and turnover but volume growth remained limited. Goldman Sachs cut Lindt & Sprüngli’s price target, citing demand elasticity pressures from elevated retail prices. Mondelēz reported Q1 volume growth of just 0.5%, while Hershey reaffirmed full-year guidance and noted strong non-seasonal retail sales lifts for its Hershey’s and Reese’s brands.

With the Strait of Hormuz situation unresolved, energy prices continue to carry a premium that affects both production costs and consumer discretionary income.

On the supply side, Ivory Coast cumulative arrivals reached 1.534 million tonnes by May 3, down just 0.1% versus last season. Fertilizer access remains a concern for many Ivorian farmers due to higher costs and Middle East-related supply issues. In Ghana, payment delays of up to six months are preventing farmers from harvesting mid-crop beans despite strong yields, with the cocoa sector supporting around 800,000 farming families.

Cocoa Week and the FCC Cocoa Dinner are taking place this week in London.

for the full cocoa market analysis, visit: https://app.vespertool.com/market-analysis/2957