ICE cocoa futures are trading in a tight range around USD 5,330 per tonne as of July 24, 2026, according to TradingEconomics data. The market has found a floor after the June selloff that pushed the July contract to USD 4,037/t, but the recovery has been capped by fundamentally bearish supply-demand signals. Prices remain 56% below the record highs of 2024, when the market breached USD 12,000/t amid the most severe structural deficit in decades.
The International Cocoa Organization (ICCO) published its May 2026 Quarterly Bulletin revising the 2024/25 cocoa year surplus to 48,000 tonnes, from 75,000 tonnes estimated in February. Production is pegged at 4.723 million tonnes against grindings of 4.628 million tonnes. While the surplus is relatively small by historical standards, it marks a decisive shift from the 489,000-tonne deficit recorded in 2023/24 — the largest deficit in over 60 years.
StoneX projects the 2025/26 season will produce a far larger surplus of 247,000 to 287,000 tonnes as West African production continues to recover. This forecast reflects improving yields from rehabilitated farms in Ivory Coast and Ghana, combined with new plantings reaching maturity that were established during the 2023-2024 price spike. If realized, this would be the largest cocoa surplus since the 2016/17 season.
West Africa supply data supports the recovery narrative. Ivory Coast's October-to-June arrivals reached 2.3 million tonnes, up 12% year-on-year, according to port data cited by Reuters. Ghana's Cocobod reports a similar recovery trajectory, with main-crop purchases up 15% through mid-2026. The improvement reflects better application of fungicides and fertilizers, which had been severely disrupted during the 2022-2024 period due to input cost inflation and smuggled crop losses.
The demand side tells a more cautious story. European grind data for the second quarter of 2026 came in below expectations, with the European Cocoa Association (ECA) reporting a 3.2% year-on-year decline. This confirms that high-end confectionery demand is struggling with the lagged effects of the 2024 price spike — manufacturers reformulated recipes, reduced cocoa content, and passed on costs to consumers. North American grind data was flat, while Asian grind showed modest 1.5% growth driven by emerging-market chocolate consumption.
Analyst views are notably divided on where prices go from here. Capital.com sees a base case of consolidation 'near USD 5,000 per tonne through Q3 2026,' arguing that the market has found equilibrium between recovering supply and structurally dented demand. Rabobank is more bearish, targeting USD 4,500/t on the basis that the 2025/26 surplus will force the market to test support levels. On the bull side, some analysts at Marex note that USD 5,000/t is still high by historical standards (the 10-year pre-2023 average was roughly USD 2,500/t) and argue that the supply recovery is fragile — a poor main crop in West Africa could quickly erase the surplus.
Ivory Coast and Ghana have maintained their Living Income Differential (LID) of USD 400 per tonne above futures prices, but actual premiums have eroded as the surplus builds. Some exporters are now trading at LID-minus-USD 50-100/t, effectively returning to pre-LID pricing in spot markets. The governments have not signaled any change to the LID framework, but the premium's erosion signals weakening producer leverage.
The forward outlook breaks into three scenarios. The bear case (30% probability): the StoneX surplus materializes fully, European demand continues to erode, and ICE cocoa falls to USD 4,000-4,500/t by Q1 2027. The base case (50% probability): 2025/26 surplus of 150,000-200,000t, prices trading in a USD 4,800-5,500/t range with the ICCO forecast as anchor. The bull case (20% probability): West African main crop disappoints due to weather or disease, surplus evaporates, and prices return to USD 6,000-7,000/t.
Cocoa buyers should adopt a measured hedging strategy that recognizes the surplus trajectory while protecting against supply-side tail risk. The base case of USD 4,800-5,500/t through year-end suggests that forward coverage at prices below USD 5,000/t offers attractive value — particularly for H1 2027 delivery, where the full impact of the West African supply recovery will be felt. Consider layering in put options at USD 4,500/t strike prices to protect against the StoneX surplus scenario, where a re-test of USD 4,000/t is possible. On the upside, the bull case risk — a West African crop shortfall — is underappreciated by the current futures curve. Buying USD 6,500/t call spreads (long call at USD 6,500, short call at USD 7,500) for H1 2027 provides cost-effective tail protection. The biggest tactical decision is whether to lock in H2 2027 volumes now or wait: current forward premiums over the spot curve are modest, suggesting limited penalty for waiting until Q4 2026 data clarifies the 2025/26 main crop trajectory.