FX.co ★ Cocoa Futures Edge Up, Still Near 20-Month Low

Cocoa futures are currently hovering around $6,027 per tonne, buoyed by robust demand figures from Europe. The third-quarter cocoa grind in the region experienced a 4.8% decrease year-on-year to 337,353 tonnes. This contraction was less severe than the nearly 10% drop that traders had initially expected, indicating a slightly more stable demand than anticipated. Nevertheless, cocoa prices continue to remain near $5,822, the lowest recorded since February 2024, as the market anticipates a potential supply surplus this season. Enhanced weather conditions in West Africa, which is the primary cocoa-growing region globally, have improved harvest forecasts and alleviated concerns about global supply constraints. In response, both Ivory Coast and Ghana have substantially increased the farmgate prices to bolster farmers' income and deter smuggling activities. Ghana has raised its 2025/26 price by 12% to 58,000 cedis per tonne, following an earlier 55.6% rise by Ivory Coast. This increase in prices is expected to incentivize quicker sales and greater investment in crop production. Analysts project that global production will surpass demand by approximately 186,000 tonnes in the 2025/26 season, which is more than double the surplus observed last season.