What the market is experiencing now looks increasingly like a positioning-driven repricing in an environment of thin liquidity, weak conviction, and a heavily offside trade.
Predictions at the start of the year for an average mid-term reset of around $4-5,000 MT is what we are beginning to see. In February, the ICCO predicted a global supply surplus of 75,000 tonnes of cocoa, down from earlier estimates of up to 247,000 tonnes by some analysts.
The key surprise over the past week was not the weather narrative itself — traders have been discussing El Niño risk for months — but the realisation that speculative shorts were still building into a rising market.
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An ongoing concern in West Africa is the estimated 70%+ regional prevalence of CSSV (Cacao swollen shoot virus), which is decimating farms and causing shortages of beans. A 2024 survey reported that about 31% of cocoa land in Ghana was affected by cacao swollen shoot disease nationally, up from 17% in 2017, supported by current surveillance data used by Cocobod, Ghana’s regulatory body.
Latest COT (Commitment of Traders) data showed managed money adding roughly 7–8K lots of fresh short exposure across London and New York, pushing the net speculative short back toward 58–60K lots overall. In New York alone, funds lifted their net short to nearly 20,000 lots, the largest bearish position in more than three years.
That positioning now matters far more because cocoa prices have already rebounded roughly 24% from recent lows. Once the market pushed through technical resistance, the trade became vulnerable to forced buying rather than discretionary buying.