Global cocoa prices climbed to their highest level in nearly three months on May 6, 2026, driven by deteriorating crop signals across West Africa, a geopolitical shipping crisis and a potential short-covering rally in futures markets, developments that carry direct consequences for Ghana’s economy.
Early crop surveys for the 2026/27 West African season showed below-average cherelle formation on cocoa trees, an early indicator of pod development that signals a weak main harvest starting in October. The data compounded existing concerns about drought across the region. The African Flood and Drought Monitor recorded as of March 29 that drought conditions were blanketing approximately two-thirds of Ghana and more than half of Côte d’Ivoire, the world’s two largest cocoa producers, which together account for more than half of global supply.
The Strait of Hormuz closure has added a further price floor. The waterway’s continued disruption has squeezed fertiliser supply chains reaching cocoa-growing regions while simultaneously pushing up global shipping rates, insurance premiums and fuel costs. European processors have reported natural gas price increases of 30 to 40% attributable to the conflict, adding significantly to the cost of cocoa grinding and processing.
Commodity research firm StoneX has revised its 2026/27 global cocoa surplus estimate sharply downward to 149,000 metric tonnes (MT) from a January forecast of 267,000 MT, citing risks to the West African crop from an expected El Niño weather event. StoneX also trimmed its 2025/26 surplus forecast to 247,000 MT from 287,000 MT. Rabobank earlier cut its 2025/26 estimate to 250,000 MT from 328,000 MT.
Demand signals present a mixed picture. The National Confectioners Association (NCA) reported that North American first-quarter cocoa grindings fell 3.8% year-on-year to 106,087 MT, while the European Cocoa Association (ECA) recorded a 7.8% year-on-year decline in European grindings to 325,895 MT, the lowest first-quarter reading in 17 years. However, the Cocoa Association of Asia (CAA) reported a 5.2% year-on-year rise in Asian grindings to 223,503 MT, sharply beating expectations of a 6.7% decline, suggesting demand is shifting rather than simply contracting.
For Ghana, the price rally arrives against a backdrop of deliberate policy pain. Last month, the government cut the official farmgate price paid to cocoa farmers by nearly 30% for the 2025/26 growing season. Côte d’Ivoire also announced a 57% cut in farmer pay linked to the mid-crop harvest. Both decisions reflect the pressure of managing cocoa revenue amid currency volatility and an International Cocoa Organization (ICCO) surplus environment. The ICCO in March raised its 2024/25 global cocoa surplus estimate to 75,000 MT, the first surplus in four years, with global production climbing 8.4% year-on-year to 4.7 million MT.
Intercontinental Exchange (ICE) cocoa warehouse inventories have climbed to a 20.5-month high of 2,667,760 bags, pointing to ample near-term supply even as the next harvest outlook weakens. If current drought conditions persist through the critical growing window, the surplus picture could narrow quickly.
