When we published our 2025-2026 cocoa season outlook, we described a sector at a crossroads: tight supplies easing, sustainability standards taking root, and a regulatory deadline on the horizon. Halfway through 2026, cocoa and coffee markets have entered a period of pronounced volatility, an El Niño event has been confirmed in the Pacific, and the EU Deforestation Regulation (EUDR) is now less than six months from application for large and medium operators. This mid-year update looks at what the first half of the year has delivered, and what the second half will demand.
A Cocoa Market Caught Between Two Narratives
The cocoa market spent the past month telling two contradictory stories at once. The scarcity story: futures climbed above $6,400 per tonne in early July, their highest since November 2025, as heavy rains in Côte d’Ivoire and Ghana disrupted harvesting and raised disease risk, with some analysts projecting Ivorian output falling to 1.7-1.8 million tonnes next season from roughly 2.2 million. The abundance story: Ivorian port arrivals are up around 21% year on year, exchange-certified inventories sit at a near two-year high, and European first-quarter grindings fell to a 17-year low. The collision produced a rally of more than 50% in a month, then a 6% single-day drop on July 11. Field surveys this month should clarify which story holds.
The bigger structural news comes from the producers themselves. On July 14, Nigeria, Ghana, Côte d’Ivoire, and Cameroon, the source of roughly two-thirds of global production, are set to sign the Abuja Declaration, establishing a Cocoa Value Addition Alliance to coordinate policy, harmonize standards, and negotiate with buyers as a single bloc. Under the theme From Bean to Brand, the ambition is to retain more of the chocolate value chain at origin: Nigeria will sign a national accord with measurable processing targets, anchored by a 70,000-tonne plant at Sagamu due in 2027, and the pact extends the season and farmgate price alignment Ghana and Côte d’Ivoire agreed in June. Notably, an early alliance priority is a joint position on EUDR implementation, including EU recognition of national traceability systems and the principle that compliance costs must not fall on smallholders.
What this means: sourcing terms across the four origins are likely to converge, reducing room to arbitrage between them. National traceability systems will carry more weight; if the bloc secures EU recognition, integrating with them becomes the compliance path of least resistance. And with governments insisting compliance costs stay off the farm gate, the burden of collecting and verifying farm-level data will sit more squarely with exporters and first operators. Execution remains the open question, but the direction is clear: more origin-side structure, more origin-side data.
Coffee Harvest Delays and El Niño Watch
Coffee has mirrored cocoa’s turbulence. Arabica futures touched a five-and-a-half-month high in early July, fell nearly 8% in a single session, then rebounded more than 12% later the same week. Robusta has followed a similar path.
The fundamentals are genuinely mixed. Brazil is expected to deliver a large 2026/27 crop, yet the harvest is running well behind schedule, roughly 52% complete as of July 1 against 60% a year earlier, after heavy June rains delayed fieldwork and raised quality concerns. More rain is forecast for the second half of July, right in the middle of harvesting and drying. Exchange-certified arabica stocks remain historically limited, and well-capitalized Brazilian growers are in no hurry to sell after two strong years, keeping export flows tighter than crop size alone would suggest.
The larger question hangs over 2027/28. An El Niño pattern was confirmed in June, and US forecasters place the probability of a very strong event at around two-thirds. For coffee, the critical window arrives in September and October, when delayed rains could disrupt flowering in Brazil; for cocoa, El Niño historically brings hotter, drier conditions to West Africa. Both supply chains are entering their most consequential regulatory period with an unusually large climate risk on the horizon.
Six Months Out. The Timeline Is Firm.
Amid the market noise, the regulatory picture has become clearer. The EUDR applies from 30 December 2026 for large and medium operators, and from 30 June 2027 for micro and small operators. The Commission’s simplification review this spring proposed no further extensions. Three first-half developments deserve attention:
- Scope is expanding. Draft delegated acts would add soluble coffee and certain palm oil derivatives, so compliance teams should revisit product lists.
- Responsibility is concentrating at the first point of entry. Full due diligence now sits with the operator that first places goods on the EU market, raising the stakes for importers and manufacturers whose statements must stand on credible farm-level data.
- Infrastructure is being reinforced on both sides. The EU is strengthening the Information System companies use to submit due diligence statements, while national traceability systems in Côte d’Ivoire and Ghana, aligned with ARS-1000, continue their rollout.
The core requirements are unchanged: plot-level geolocation, evidence of legal and deforestation-free production, and a due diligence statement before goods cross the EU border. What has changed is the time left to build the systems that produce that evidence.
The Common Thread: The First Mile
Looking across cocoa, coffee, and the regulatory landscape, one thread runs through the past six months: the information that moves markets and satisfies regulators originates in the same place.
- The price swings were driven by farm-level information. Pod counts in Ivorian growing regions, harvest progress in Minas Gerais, port arrivals, and farmer selling decisions moved billions in market value. The volatility partly reflects how incomplete and delayed that information remains across supply chains built on millions of smallholder farms.
- The EUDR asks for that same information, verified and at scale. Plot-level visibility into where commodities are grown and under what conditions is something markets have never had, and the regulation now requires it.
- One investment serves both purposes. Organizations that have registered farmers, mapped plots, and digitized transactions from the farm gate onward, whether through national systems, certification programs, or digital platforms such as Farmforce and others, gain both the documentation the regulation requires and earlier, more reliable insight into crop conditions than the market at large possesses.
Conclusion: A Demanding Second Half
The outlook for the remainder of 2026 is demanding but navigable. Weather risk is elevated, markets are likely to stay volatile until harvest data replaces speculation, and the EUDR deadline will arrive in the middle of the 2026/27 cocoa main crop, meaning compliance systems will be tested under real operating conditions from day one.
The direction of travel, however, has not changed. Producing countries continue to build out national traceability, the EU has committed to its timeline, and the tools connecting farm-level reality with regulatory requirements are more mature than a year ago. Organizations that use the coming months to close remaining gaps in farmer registration, plot mapping, and data quality will enter 2027 with both a compliance position and a market intelligence advantage. Those that wait will find that the season, the climate, and the regulator do not queue politely. They arrive together.
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.
