Earlier this week, London cocoa futures surged 12.2%, while New York cocoa futures gained a remarkable 13.1%, in one of the strongest moves seen since the height of the 2024-25 cocoa crisis. Those advances were extraordinary even by cocoa’s standards, although they were narrowly eclipsed by an even larger rally in arabica coffee as investors piled back into the soft commodities complex.
The scale of the move suggests this is no longer simply a weather-driven market. Instead, cocoa is increasingly repricing around future supply risk, speculative positioning, and changing commercial buying behaviour.
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The Market Is Pricing Probability, Not Certainty
The immediate catalyst remains growing concern over the development of El Niño and what it could mean for the 2026-27 West African crop.
Attention is firmly focused on pod development and survival rates ahead of the main crop harvest, with traders assigning a higher probability to weather-related production losses than they were only a few weeks ago. Reuters reported that London cocoa reached multi-month highs as concerns over El Niño intensified, while Côte d’Ivoire temporarily paused forward sales for the new crop until production prospects become clearer, Reuters reported.
Whether those risks ultimately translate into lower production remains uncertain. But cocoa markets have rarely waited for confirmation before repricing supply risk.