Lindt has announced plans to cut prices for its confectionery, starting with lower pricing for seasonal Christmas products and then more broadly from the start of next year. The lower prices are expected to coax consumers back and lift demand over 2027. That will also rely on inflation easing more broadly, which might not happen in the near term while conflict-driven spikes in energy prices continue, but could start in 2027 as energy markets normalize. For now, the signals from major chocolate makers point to a challenging Q4 seasonal demand period.
The product side of the cocoa market reads the same way. Spot cocoa powder fell 7% week on week, giving up some of its recent support against the rest of the complex, and the liquor and cocoa butter ratios kept declining, which points to subdued product demand. Processing economics may get some help from cheaper beans than last year, but the higher cost of energy works against them.
Futures hold up on weather risk
On the exchanges, ICE Europe cocoa rose 5.7% over the past week to close at 4,231 GBP/t for the December 2026 contract. Prices dipped below 4,000 GBP/t at the start of the month on strong near-term supply and have since held at higher levels on some weather risk. ICE US cocoa gained 6.8% to $5,700/t. Speculative interest looks relatively low: in the week ending September 29, ICE cocoa speculators cut their net short position by 190 contracts to 26,137, basically unchanged.
The weather risk is spread across several origins. Rains in Ivory Coast improved overall, but some growing regions remain very dry, and readings in Ghana are turning toward a shortfall in some regions. A farmer survey published by Reuters found growers concerned that poor rains could linger into October, bringing an early end to the main crop and a possible decline in volume of around 17% against 2025/26. October rains will be critical for the 2026/27 outlook. Outside West Africa, Ecuador is far wetter than normal, with local press reporting a risk of a decline of around 100,000 tonnes, and Indonesia, still short of rain, is expected to see supply fall below 200,000 tonnes.
Vesper sees several supply risks for Q4, alongside possible ongoing demand weakness in Europe that is capping the upside. Q3 grindings, due mid-month, should show whether the consumption outlook holds.
