Cocoa was on a rollercoaster. New York contracts briefly rose 2.3% on Friday before giving up ground, translating into a weekly decline near 7%. The back and forth captures a market torn between comfortable short-term supplies and growing concerns about the main crop in the top producing countries.
The push and pull is real. On one side, inventories look adequate right now. On the other, a strengthening El Niño is turning up the heat on key growing regions.
Ghana's state-run exporter reports that output could shrink by 38% versus a year earlier. At the CAA International Cocoa Conference in Singapore this week, the CEO of Guan Chong Berhad, Asia's largest cocoa processor, said the global market is likely to swing into deficit in the 2026-27 season, which would be the first shortfall in three years. Bloomberg News also found that six of nine additional traders and brokers surveyed at the event expect a deficit.
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Europe, the biggest consuming region, has been wobbly on demand. In Asia, processing activity jumped 25% during the second quarter. Still, a bounce in consumer appetite for chocolate does not automatically mean a matching jump in cocoa use.
After the huge rally a couple of years ago, manufacturers trimmed product sizes and leaned on alternative ingredients. Darren O'Brien, who oversees cocoa at Mondelez International as chief cocoa officer, put it plainly: "The size of offerings has changed. So if you get a smaller-sized bar, you're using less cocoa." He added, "Even as the demand comes back, the volume of cocoa being demanded could be different even though you're selling the same number or more bars."
Raw sugar prices rose even as Brazil's agriculture ministry reported a faster domestic cane crush and a larger share of cane headed to sugar during the first two weeks of August. Despite that, Brazil's sugar output is roughly 12% lower since the season began. Arabica coffee futures were on track for a second straight weekly decline, even with a modest gain Friday, as plentiful Brazilian supplies start flowing into the market. This week, StoneX raised its projection for Brazil's total coffee harvest to 77.2 million bags, an increase of 2.5% from its previous estimate.
Near term, the market looks supplied, which takes some heat off prices. But weather risks, Ghana's production warning, and a possible 2026-27 deficit keep the longer-term picture tight. Add in smaller bars and recipe tweaks, and demand might recover without soaking up as much cocoa as before. Translation: prices could stay choppy, and your chocolate habit may keep changing even if the sticker price holds steady.
