Cocoa’s historic crunch is easing further as harvests pick up

LONDON – The world’s cocoa crunch is finally showing signs of a turnaround, as better harvests in South America and waning demand put supplies on track for a back-to-back surplus.

Production is forecast to outpace consumption by about 186,000 tonnes in the 2025-26 season that starts in October, according to the average estimate of as many as 13 analysts and traders compiled by Bloomberg.

That would be more than double the size of the surplus in the current season, the survey showed. 

The improvement will help replenish global inventories that had been depleted following consecutive poor harvests in West Africa, a major growing region.

That pushed New York futures up more than fourfold in the past three years, reaching a record in December and raising chocolate costs for consumers.

While still historically high, prices have fallen about 40 per cent in 2025 as consumers buy less chocolate and chocolatiers reformulate recipes. Coupled with the prospect of better harvests, that could limit fresh rallies.

“Prices are expected to trend downwards in the short and medium term,” Mr Oran van Dort, a Rabobank analyst, said on the sidelines of the European Cocoa Forum that took place between Sept 16 and 18.

Much of the supply improvement comes down to South America.

Farmers in Ghana and Ivory Coast – the world’s two biggest producers – receive a fixed farmgate price, set by the government, which has limited the immediate benefit from the cocoa rally.

Markets elsewhere are liberalised, and the run-up incentivised farmers to expand plantings, with trees now beginning to bear beans. 

Production in Ecuador, the third-largest grower, is expected to increase by about 5 per cent to 580,000 tonnes in the next season on better yields and new plantations, Mr Julio Moscoso, commercial director at Latam Commodity Traders, said on the sidelines of the European event. 

Combined with increases in nations like Peru, Colombia and Venezuela, that may boost South American output by as much 100,000 tonnes, barring bad weather, said Mr Vladimir Zientek, a trading associate at StoneX.

Expensive beans are also straining cocoa demand as chocolatiers raise prices of their products, adding to the potential surplus.

Analysts and traders in the survey said they expect consumption to continue slowing as consumers cut back and some chocolatiers buy less or use cocoa alternatives to reduce costs.

Bean processing dropped in Europe, Asia and North America in the second quarter, and the next quarterly figures may show further declines, they said.

Still, output in West Africa’s heavyweights is struggling to recover to peak levels due to unfavourable weather, ageing trees and the spread of crop diseases, like swollen shoot. That remains a key supply risk. 

Output in the nation is projected at about 1.8 million tonnes, according to the average estimate of five traders in the survey, who indicated that would be near steady with the current season.

Traders are monitoring weather conditions as the return of rains helps boost soil moisture following one of the harshest dry spells on record for a stretch of July and August. 

“Despite rainfall improving in the last week and the upcoming forecasts displaying further precipitation, overall weather has not been ideal for 2025-26 production,” Mr van Dort said. “Weather in the last two months has most likely led to some reductions in production forecasts.” BLOOMBERG