Five-day rise in cocoa prices was the fastest since 1989

Cocoa futures completed a five-day rally, posting the largest increase for such a period on record since 1989, amid renewed concerns about next season’s harvest prospects.

The most-active contract jumped 16% to £3,110 per tonne, reaching a three-month high. The London market was closed on Monday for a public holiday and is now catching up in New York trading. On Tuesday, the New York contract rose 6.3% to $4,129, extending an 8% jump in the previous session.

According to Bridgeton Research Group Llc, commodity trading consultants using trend-following algorithms contributed to the price rise by covering short positions in futures. Traders who had previously taken extremely short positions have now opened long positions in the London market for the first time since June.

Preliminary surveys for the 2026-2027 crop indicate below-average cherel formation on cocoa trees, suggesting a weak start to the main harvest, which typically begins in October, said Andrew Moriarty, senior cocoa manager at Expana. Cherels are young pods that develop from flowers and mature within five to six months.

These prospects are further clouded by the risk of a strong El Niño, which could bring hotter and drier conditions to key producers such as Ecuador and Indonesia. Last week, StoneX lowered its global cocoa surplus forecast to 149,000 tonnes for the 2026-2027 marketing period, citing the impact of El Niño.

“The market is reacting to talk of El Niño and adjusting its balance expectations for 2026-2027,” Moriarty said. “We’re already seeing problems in West Africa, with a low cherel crop, and El Niño could impact the harvest in the middle of next year.”

Moriarty added that the unfavorable outlook is due to the trees still recovering from last year’s drought, and yields have also been reduced by shoot swelling disease. Fertilizer costs are also likely to rise, limiting farmers’ ability to afford needed inputs in a low cocoa price environment.

Tags: prices, cocoa