Cocoa Prices Climb as Fertilizer Supply Fears Shake West Africa’s Market Outlook
Global cocoa prices edged higher on Tuesday, driven by renewed market anxiety over tightening fertilizer supplies in West Africa, just as the region prepares for a critical planting season.
The price rebound follows growing concerns that the closure of the Strait of Hormuz, a vital global shipping route, could disrupt fertilizer exports from the Gulf region. With nearly 30% of the world’s fertilizer supply passing through the strait, the situation poses a significant threat to agricultural inputs across key cocoa-producing nations like Ghana and Ivory Coast.
This development has sparked short-covering activity in the market, reversing last week’s bearish trend that saw cocoa prices fall to a two-week low. The earlier decline had been fueled by expectations of a strong harvest, as farmers in both countries reported favorable rainfall conditions boosting cocoa pod development.
Despite the recent uptick, cocoa prices continue to face downward pressure from rising global inventories. Data from ICE shows cocoa stockpiles climbing to a 7.75-month high of 2,348,743 bags, highlighting ample supply in the market.
Further weighing on sentiment are policy decisions in West Africa. Ghana recently reduced the official price paid to cocoa farmers by nearly 30% for the 2025/26 season, while Ivory Coast announced a 57% cut in farmer payments for its ongoing mid-crop harvest. Together, the two nations account for more than half of global cocoa production, making these moves highly influential on global pricing dynamics.
Still, supply-side risks persist. Slower cocoa deliveries to ports in Ivory Coast have provided some support to prices. Latest figures show shipments for the current marketing season (October 2025 to March 2026) declined by 2.8% year-on-year, signaling potential tightening in near-term supply flows.
On the global stage, rising logistics costs are compounding the situation. The Strait of Hormuz disruption has not only affected fertilizer availability but also increased shipping rates, insurance premiums, and fuel costs, factors that ultimately raise expenses for cocoa importers.
However, demand-side weakness continues to cast a shadow over the market. High chocolate prices have dampened consumer appetite, leading to reduced processing activity worldwide.
Swiss-based Barry Callebaut AG, the world’s largest bulk chocolate producer, reported a sharp 22% drop in cocoa division sales volumes, citing subdued demand and a strategic shift toward higher-margin segments.
Industry data reinforces this trend. The European Cocoa Association reported an 8.3% year-on-year decline in Q4 grindings, the steepest drop in over a decade. Similar declines were recorded in Asia by the Cocoa Association of Asia, while North America saw only marginal growth, according to the National Confectioners Association.
Meanwhile, increased cocoa exports from Nigeria, the world’s fifth-largest producer, are adding to global supply pressures. December exports rose 17% year-on-year, although overall production is expected to decline in the upcoming season.
Read Cocoa Beans Rot as West African Farmers Turn to Alternative Livelihoods After Price Crash
Looking ahead, forecasts remain mixed. Ivory Coast projects a 10.8% drop in output for the 2025/26 season, while Rabobank has revised down its global surplus estimate.
On the other hand, the International Cocoa Organization recently raised its surplus outlook for the 2024/25 season, marking the first surplus in four years, while StoneX anticipates continued surpluses into 2026/27.
As the cocoa market navigates a complex mix of supply disruptions, policy shifts, and weakening demand, stakeholders across the value chain are bracing for continued volatility in the months ahead.
