Cocoa Prices Climb Again as El Niño Threatens West African Harvest

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Summary · why it matters

Cocoa prices are rising again as climate conditions threaten the West African harvest, renewing pressure on chocolate makers still recovering from the historic 2024 spike. New York cocoa futures closed at $5,670 per metric ton Friday, reversing some of the previous session's decline, with traders focused on supply risks just weeks ahead of Halloween. Goldman Sachs warned last week that a potentially powerful El Niño could leave the cocoa market vulnerable to another supply squeeze, and analyst Lina Thomas said this year's growing season already resembles the run-up to the 2023-24 crisis, with excessive early rainfall followed by unusually dry weather. Cocoa first climbed above $11,000 per metric ton in April 2024 and reached a record $12,565 that December, after hedge funds and other traders bought a record $8.7 billion worth of cocoa futures contracts on the London and New York markets by early 2024. Thomas said the market may be more vulnerable to a poor harvest than in 2023-24, though she does not expect the same futures-market liquidity squeeze, and Kleos Advisory founder Tedd George said he does not expect another move to $12,000. Recent results show the strain: Lindt & Sprungli cut its 2026 sales-growth forecast, Barry Callebaut reported a 4.4% decline in the global chocolate confectionery market in its fiscal third quarter, and Nestlé blamed coffee and cocoa prices for reducing its gross profit margin by 20 basis points to 46.4%.

Impact on assets 7

Consumer Staples▼
Barry Callebaut AG
BARN
▼ NegativeSupplyrelevance

Rising cocoa prices and El Niño harvest risk squeeze input costs, and its fiscal Q3 showed a 4.4% decline in the global chocolate confectionery market.

Nestle S.A.
NESN
▼ NegativeSupplyrelevance

Nestlé blamed coffee and cocoa prices for reducing its gross profit margin by 20 basis points to 46.4%.

Financials▲
Others▲