Cocoa prices settled sharply higher on Thursday, with New York cocoa hitting a six-month high and London cocoa reaching a nine-and-a-quarter-month high, after Barry Callebaut AG, the world's largest cocoa processor, reported a 5.7% rise in fiscal third-quarter sales volumes, the first increase in more than two years, signaling recovering demand. September ICE NY cocoa closed up 403, or 6.66%, and September ICE London cocoa closed up 312, or 6.94%. Prices have also rallied over the past three weeks as heavy rains in Ivory Coast and Ghana flooded roads, cutting off farmers' access and threatening supplies, while excessive moisture raises the risk of crop diseases. Underlying support comes from the US Climate Prediction Center's warning that the emerging El Niño pattern will likely be one of the strongest in over 75 years, potentially bringing drier conditions to West Africa and stressing cocoa trees. Early surveys of the 2026/27 Ivory Coast main crop show below-average cherelle formation and an average estimate of 1.8 million metric tons, down 18% from about 2.2 million metric tons in 2025/26. However, rising ICE cocoa inventories to a nearly two-year high of 3,135,943 bags and signs of larger supplies, including a 20% year-on-year increase in Ivory Coast port arrivals to 2.04 million metric tons this season, are bearish factors. Weak demand is also evident, with first-quarter North American cocoa grindings down 3.8% and European grindings down 7.8% to a 17-year low, though Asian grindings unexpectedly rose 5.2%. StoneX recently cut its 2026/27 global cocoa surplus estimate to 149,000 metric tons from 267,000 metric tons, citing El Niño risks.
Barry Callebaut AGBarry Callebaut reported a 5.7% rise in fiscal Q3 sales volumes, the first increase in over two years, signaling recovering demand.