London cocoa futures barely moved last week. The March contract rose GBP 3, or 0.1%, on the previous Friday and sits 1.4% below where it was a month ago. New York March was flat on the week and 4.6% lower on the month. Martijn Bron, who writes Vesper’s bi-weekly cocoa market report, describes a market stuck between a rock and a hard place: an El Niño weather scare could justify a rally, while the state of the consumer does not, and that may help explain why prices have moved so little.
Supply fear without proof at scale
Forecasters see a strong to very strong El Niño as likely through January to March 2027, with the chance staying above 83%. Goldman Sachs analysts say a potentially record-breaking event raises the risk of a poor West African crop, and that the physical market is likely less prepared for a shortage than in 2023/24, with lower inventories and demand destruction already behind it. They do not expect prices to return to the 2024 highs of around USD 12,000/mt, because better liquidity makes a spike of that size less likely.
Bron points out that cocoa futures are usually driven by supply shocks, and that for now the market has the fear of one without the proof of it at scale. ICE New York exchange stocks rose to 3.55 million bags, about 231,000 mt, and US warehouse stocks are at a two-year high. Speculators added to their bets on lower prices, with the combined London and New York managed money net short widening by 6,700 lots to 19,100 lots.
Demand is where the pressure shows
Chocolate makers are feeling it. Lindt & Sprüngli cut its 2026 sales growth forecast again and now expects organic growth of 0% to 2%, against 4% to 6% before, and its shares fell nearly 9% in Zurich. The company pointed to lower-than-expected order volumes in its seasonal businesses, with Switzerland, Germany and Austria hit hardest. Bron ties weak chocolate demand to the high cost of living and to governments under budget pressure seeking more tax income, and sees an end to the conflicts in the East and Middle East as the best way to bring inflation down.
In Ghana, Cocobod raised 3.39 billion cedis, about USD 289 million, in its first sale of cocoa bills since its debt default, at a coupon of 11%, though the first tranche was undersubscribed at that rate. Whether financing slows the flow of beans this season remains to be seen.
The full report also covers Ivory Coast arrivals, Brazil’s processing data, Barry Callebaut’s expansion plans in Ivory Coast and new EU rules on sustainability labels.
