Global cocoa market surplus to shrink amid El Nino impact, says broker

A broker has forecast that the global cocoa market surplus will shrink due to the impact of the El Niño weather phenomenon. The report highlights that inclement weather and farmland destruction are expected to hit cocoa yields in Ghana, one of the world's largest producers, next season. StoneX has drastically reduced its surplus forecast for the 2026/27 season, warning of climate risk in West Africa. The revision reflects broader concerns about supply constraints in the region, which accounts for a significant share of global cocoa output. The broker's analysis points to potential upward pressure on cocoa prices as supply tightens.

Global Impact

Economically, a tighter cocoa market could lift prices for the commodity, benefiting producing nations like Côte d'Ivoire and Ghana but raising costs for global confectionery firms. Socially, reduced yields may strain smallholder farmers in West Africa, who are already vulnerable to climate variability.