West African cocoa harvest is once again hampered by both weather and disease, causing cocoa futures to surge by over 70% since June.

A new cocoa season is underway in West Africa, shrouded in uncertainty. The combined pressures of El Niño, the spread of black fruit disease, and shortages of agricultural inputs are posing a severe challenge to the world's most important cocoa-producing region, and market concerns about supply prospects are driving futures prices higher.

On September 1, Bloomberg reported that New York cocoa futures have risen by more than 70% since El Niño was confirmed in June. Ivory Coast, the world's largest cocoa producer, is expected to see its output decline by about 20% to 1.75 million tons this quarter, while Ghana, the second-largest producer, is expected to see a 13% decrease.

As a result, market expectations for the global supply surplus in the 2026-27 production season have narrowed significantly to approximately 25,000 tons , far below previous levels, and several institutions have also lowered their surplus forecasts. Such a limited supply surplus means the market has virtually no buffer. If more adverse factors arise during the production season, the supply-demand balance could deteriorate rapidly.

"We are at a turning point, at least in terms of the weather. We are still waiting to see what happens, because anything can happen," said Oran Van Dort, an analyst at Rabobank.

Côte d'Ivoire and Ghana: Both major producing countries face pressure on output.

Côte d'Ivoire and Ghana together contribute more than half of the world's cocoa production, and changes in their output have a decisive impact on the global supply pattern.

According to a Bloomberg survey of five traders and pod counters, preliminary estimates for Côte d'Ivoire's main crop production this season are 1.55 million to 1.6 million tons, roughly the same as last season. However, the final production figures will not be confirmed until the main production season officially begins in November. If El Niño leads to stronger Hamadan winds, cocoa production in the latter part of the main season could face further pressure.

In Ghana, the southwestern production region has recently experienced persistently cool and cloudy weather, with intermittent rainfall and insufficient sunshine creating favorable conditions for the spread of black pod disease. Local farmer Simon Essah stated that the number of cocoa pods this year is significantly lower than the same period last year, and even on some trees where fruit is still present, the pods are generally smaller. "I am not optimistic about the upcoming season," he said.

Nigeria and Cameroon: Floods and agricultural supply shortages add further pressure

Other major cocoa producing regions in West Africa are also facing multiple challenges, further exacerbating regional supply pressures.

Mufutau Abolarinwa, president of the Nigerian Cocoa Association, predicts that the country's output this season will decline by 2.4% to 288,000 tons. Enighe Tiku, a farmer in the southeastern producing region, said that after months of drought, the area was suddenly hit by floods, with strong winds blowing down developing pods and destroying numerous cocoa trees. "There are no signs of a good harvest coming up," he said.

In Cameroon, local industry regulators expect this season's yield to be roughly the same as last year, but black fruit disease, aphids, and other pests continue to increase in major producing areas. Meanwhile, high agricultural input prices have led to a proliferation of counterfeit and substandard pesticides, further weakening the effectiveness of pest and disease control.

Serah Nangeh Sunjo, a farmer who owns 25 hectares of plantation, said that the high cost of pesticides is driving up sales of counterfeit products, which are far less effective than legitimate pesticides.

Inventory buffers and weak demand: the market is not entirely without support.

Despite the tightening supply outlook, some market participants point out that the inventory accumulated from the previous demand contraction and production rebound can still provide a certain buffer for the new production season.

Previously, three consecutive years of supply shortages had driven New York cocoa futures to record highs at the end of 2024. Prices subsequently fell sharply, mainly due to reduced consumer purchases and several chocolate manufacturers adjusting their product formulas during the high-price period, leading to continued weak demand. Jonathan Parkman, head of agricultural sales at Marex Group, said that existing inventory "is a fairly substantial buffer" and will help cope with potential supply problems in the 2026-27 season.

However, whether this buffer can withstand the El Niño test remains to be seen. Jean Kean, a farmer in western Côte d'Ivoire, is optimistic about current soil moisture, believing that sufficient water is beneficial for fertilization, but overall market sentiment remains cautious. StoneX and Hedgepoint Global Markets have both lowered their forecasts for the global cocoa supply surplus for the 2026-27 season. Market consensus is shifting: the supply-demand balance in the new season may be more fragile than previously expected.

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