27.10.2025 - Daily Cocoa Market Report

Market Overview

Cocoa futures fell sharply on Monday, reversing part of last week’s rally as improved weather and early signs of stronger harvests in West Africa weighed on sentiment. Both London and New York contracts traded lower amid expectations of a potential global surplus later in the 2025/26 season.

New York December cocoa settled at $6,182 (–2.2%), while March closed at $6,214. London December cocoa ended £147 lower at £4,372 (–3.2%), with March at £4,404.
Trading volumes eased to 21,937 lots (US) and 19,820 (UK) as speculative funds adjusted positions following the prior week’s surge.

Analysts at Friedberg Mercantile Group said, “The fortunes of the Ivory Coast crop remain the single most important factor for this market. A recovery is a strong assumption, but not a concrete reality.”

Inventory / Stocks

US certified stocks: 1,842,022 bags (–1,699 vs Friday)
UK certified stocks: 488,906 tons (–625 vs Friday)

Inventories continued to edge lower for a sixth session, bringing the combined decline since mid-October to roughly 28,000 tons. The stock-to-grind ratio remains near 31.5%, still among the tightest of the year despite improved harvest prospects.

Futures / Market Metrics

At £1 = $1.34, London cocoa equates to $5,859 / t, widening the trans-Atlantic gap to $323 in favor of New York.

Market Structure (Contango / Backwardation)

• London: Dec £4,372 → Mar £4,404 (+£32) → mild contango
• New York: Dec $6,182 → Mar $6,214 (+$32) → flat contango

Slight contango reflects improved near-term supply confidence following favorable rains and early crop arrivals, though fundamentals remain tight by historical standards.

Supply and Policy Developments

Ivory Coast

Exporters estimate cocoa arrivals reached 214,000 tons by October 26, down 24.9% year-on-year from 285,000 tons in the same period of 2024/25.
Between October 20–26, approximately 82,000 tons were delivered to the ports of Abidjan (38,000 t) and San Pedro (44,000 t).

Rains were below average last week, but sunshine and adequate soil moisture have aided pod development for the main crop. Farmers expect healthy yields if conditions persist through mid-November.

Ghana

Authorities reaffirmed plans for a $200 per-ton premium for EUDR-compliant cocoa, positioning certified Ghanaian beans as a benchmark for traceable supply in 2026 contracts.

Malaysia

Malaysia confirmed a tariff exemption on several commodities, including cocoa, potentially facilitating imports from Ecuador, which currently faces a 15% duty. This could reshape Asian trade flows by encouraging a greater inflow of Ecuadorian beans.

Indonesia

Domestic consumption continues to exceed production, forcing imports of around 150,000 tons in 2024. The ongoing shift of smallholders to palm oil and rubber underscores Asia’s reliance on imports.

Political and Regional Update

Ivory Coast: President Alassane Ouattara secured a fourth term in elections described as peaceful. Stability in the world’s largest producer reassured exporters, though rural discontent over pricing persists.

Cameroon: President Paul Biya, 92, won re-election for an eighth term with 53.7% of the vote. Clashes in Douala and Garoua left at least four dead, but cocoa operations remain largely unaffected.

Weather Conditions

Light to moderate showers continued across southern Nigeria, Cameroon, and parts of Ghana, with sunnier conditions in Ivory Coast aiding bean drying.
Forecasts suggest intermittent rains through early November — favorable for crop development but potentially slowing inland transport in wetter zones.

Confectionery Sector – Hershey Earnings Outlook

Hershey (HSY) is set to report Q3 earnings this week. Analysts expect resilient sales but lower margins due to persistently high cocoa costs. The report will offer insight into consumer elasticity and how major buyers are managing raw-material inflation. A weaker margin print could briefly weigh on speculative appetite in cocoa futures.

Outlook

The correction reflects technical pressure and improved harvest expectations, not a structural reversal. Fundamentals remain constrained by tight stocks, a slow recovery in arrivals, and lingering logistical risks.
Key support sits near $6,050 (US) and £4,350 (UK); resistance remains $6,300 / £4,450.
Short-term sentiment is neutral-to-cautiously bullish, pending confirmation of sustained Ivorian crop recovery.

Key Watchlist for This Week

• Ivory Coast arrivals (weekly export volumes)
• Ghana’s EUDR premium implementation timeline
• Hershey Q3 earnings (margin impact)
• Updated COT (ICE Europe – 28 Oct)
• Certified stock trends (ICE US / ICE Europe)
• Weather patterns across West Africa

Market Interpretation Note

Monday’s sharp pullback aligns with the Bloomberg narrative of “better supply prospects” — traders reassessing near-term surplus risks after a peaceful Ivory Coast election and favorable rains.
However, arrivals are still ~25% behind last year, meaning recovery optimism remains speculative. The combination of low stocks and seasonal dryness could quickly reverse current softness if port deliveries fail to accelerate by mid-November.

Weekly Summary Box