Six months ago the consensus in cocoa was surplus, softening prices and cooling demand. Most of that has now come apart.
Here is what actually moved in the year to date, and what it means for anyone who has to prove where their beans came from before 30 December.
1. The surplus narrative formed, then dissolved
Cocoa spent the first part of the year unwinding. Futures fell back towards $3,000 a tonne in early 2026, roughly 70% below the 2024 highs, as analysts moved from deficit to surplus forecasts and buying appetite cooled.
Then the forecasts started shrinking.
StoneX cut its 2026/27 surplus estimate to 25,000 tonnes, down from 149,000 in April. Transgraph went further, from 415,000 tonnes for 2025/26 to 80,000 for 2026/27, on production falling to 4.87 million tonnes. The US Climate Prediction Center said on 8 July that this El Niño will likely be one of the strongest in more than 75 years.
Near-term supply still looks comfortable. Ivorian port arrivals reached 1.988 million tonnes by 2 August, up 21.8% year on year, and ICE inventories hit a two-year high in late July.
So the market is holding two contradictory facts at once: plenty of beans now, and a shrinking cushion for next season.
2. Grinding moved east, and the gap widened
The Q2 numbers on 16 July were the clearest signal of the year.
Asia processed 224,646 tonnes, up 25.1%. Europe processed 316,366 tonnes, down 4.6%, its weakest second quarter in six years. First-half Asian grindings reached 448,149 tonnes, up 14.3%.
The national detail is starker. Indonesia’s Industry Ministry put Q2 grinding at 110,410 tonnes, up 30.1% on Q1, with the country now around 49% of total Asian processing volume. Malaysia rose 29.4% to 90,849 tonnes.
Two caveats worth keeping. The Asian comparison is against a soft Q2 2025, when high bean prices squeezed regional grinder margins. And grind data measures what went into plants, not what consumers ate.
Even allowing for both, the direction has held for two consecutive quarters.
3. West Africa guided down, and one reason is not about weather
At the end of July, COCOBOD told Reuters that Ghana’s production will fall by at least 16% in 2026/27. Côte d’Ivoire is expected to fall by more than 10%.
The stated causes: likely El Niño conditions, excessive rain in May and June, the tree’s alternating bearing cycle, and a low cherelle load in the Western and Western North regions, which together account for more than half of Ghana’s output. Aggravated by swollen shoot disease and ageing farms.
And by illegal gold mining, known locally as galamsey, which takes over farmland and reduces the area available for cultivation.
That last one deserves separate attention, because it is a data problem as well as a production problem.
Consider a plot mapped as cocoa in 2024 that is a mining excavation by 2026. The farmer registry still says cocoa, and nothing in the registry knows otherwise. The satellite layer sees land cover change, and cannot tell you what caused it.
Change detection registers that something happened. It does not distinguish a farmer clearing forest for cocoa, which is the conversion the regulation exists to catch, from miners destroying a cocoa farm, which is close to the opposite. Same signal, opposite meaning, opposite correct response.
The market reacted to the supply news on 3 August: London cocoa up 6.4% to £4,269 a tonne, New York up 6.95% to $5,772.
4. Coffee tightened, and the rules got wider
Arabica has been volatile rather than directional. It closed at 321.15 US cents a pound on 3 August, down 8.2% over the month but still 11.3% above a year earlier. ICE certified arabica stocks fell to their lowest since February 2024, with heavy rain delaying the Brazilian harvest in Minas Gerais.
Against that, USDA still forecasts record 2026/27 global output of 189.7 million bags. Vietnam exported 1.31 million tonnes in the first seven months of 2026, up 21.1%.
The more consequential change for coffee was regulatory. The delegated act adopted on 13 July revised Annex I, bringing soluble coffee and palm oil derivatives into scope while removing cattle leather, retreaded tyres and soybeans for sowing. Newly added products get until 30 December 2027.
Soluble is the harder case. Instant coffee is blended by design, drawing on multiple origins and heavily on smallholder robusta. Ask which plots went into a production run and the honest answer today is usually a list of countries.
5. The sector conceded that one dataset is not enough
The quietest item of the year may be the most important.
On 8 July the World Cocoa Foundation and the Alliance of Bioversity International and CIAT published an Active Deforestation Risk Assessment Methodology. WCF represents around 80% of the cocoa and chocolate sector.
The Alliance’s Louis Reymondin put the reasoning plainly: “No single dataset can fully capture the complexity of tropical agricultural landscapes.”
The methodology covers plot data quality assurance, forest baseline definition, deforestation overlay analysis, legal zoning checks, verification, and corrective actions. Only one of those is an analysis step. The rest is process, and where evidence conflicts the prescribed answer is further verification and a documented decision, not a default verdict.
That matters commercially, because the default today runs the other way. When a plot flags on thin data and there is a shipment to make, the rational commercial response is to drop the plot. Nobody records that as an enforcement decision. The farmer is not judged non-compliant, just not worth the trouble.
In galamsey districts those are the same farmers already losing acreage.
What to watch in the second half
1 September. The 2026/27 season opens, and Ghana and Côte d’Ivoire will announce harmonised guaranteed minimum farmgate prices for the first time.
The scrutiny window. The Annex I delegated act sits with Parliament and the Council for two months, extendable by two. Either can veto, neither can amend. Until it closes the scope is adopted but not final.
15 October. Q3 grind figures, and the first real test of whether Asia’s momentum is a trend or a base effect.
30 December. Large and medium operators must have due diligence systems running. That date has not moved since it was set.
Four months of harvest and one deadline. The gap between them is where most of the work sits.
Sources
- Barchart, Cocoa prices fall back as El Niño threatens West African crops
- CNBC Africa / Reuters, Ghana’s cocoa production is expected to fall 16% next season
- Pulse Ghana, World’s two largest cocoa-producing countries expected to record 10% and 16% drop in output
- Business Recorder, Cocoa futures climb as focus remains on crop outlook
- World Cocoa Foundation, Cocoa sector methodology on deforestation risk assessment, 8 July 2026
- Inside Ecology, New methodology to strengthen deforestation risk assessment across cocoa supply chains
- British Baker, Chocolate industry unveils guidance to boost sustainability
- Linklaters, Commission adopts Delegated Act on product scope and Implementing Act on the Information System
Farmforce provides digital solutions for managing the first mile of agricultural supply chains, from farmer registration and GPS plot mapping to harvest purchasing, deforestation monitoring, and EUDR compliance. To see how Farmforce can support your traceability and sourcing operations, request a demo.
