Global cocoa prices rallied sharply after Ghana announced a significant reduction in its production outlook for the 2026/27 crop season, renewing concerns about tightening global supplies from the world’s second-largest cocoa producer.

Cocoa futures on the New York market surged 7.4 per cent to close at US$5,490 per metric tonne on July 31, while London cocoa futures climbed 6.9 per cent to £4,074 per tonne.

The bullish momentum continued into Monday, August 3, with New York futures trading around US$5,664 per tonne and London contracts holding above £4,000 per tonne.

The price surge followed COCOBOD’s announcement that cocoa production could decline to between 450,000 and 550,000 metric tonnes in the next crop season, down from the 750,000 tonnes projected for the current 2025/26 season.

The expected production shortfall has been attributed to widespread cocoa swollen shoot disease, ageing plantations and the likely impact of the El Niño weather phenomenon.

The announcement quickly reversed market sentiment after cocoa prices had weakened in recent weeks on signs of improving supplies from other producing countries.

Data from Côte d’Ivoire showed cocoa arrivals at ports had increased by 21 per cent during the current marketing season compared to the same period last year, while Nigeria reported a 30 per cent increase in cocoa exports in June.

Those developments had pushed cocoa prices to four-week lows before traders rushed to cover short positions following Ghana’s revised production outlook.

Analysts say the latest forecast has significantly altered expectations for global cocoa supplies.

Commodity research firm StoneX has already reduced its forecast for the global cocoa surplus in the 2026/27 season to 25,000 metric tonnes from an earlier estimate of 149,000 tonnes, citing increasing production risks across West Africa.

The situation has been compounded by expectations of a weaker harvest in neighbouring Côte d’Ivoire, which, together with Ghana, accounts for more than half of global cocoa production.

Although cocoa prices remain well below the record highs of more than US$12,000 per tonne recorded in early 2024, they continue to trade at almost twice their long-term historical average.

Market analysts attribute the sustained strength in prices to structural challenges including widespread disease outbreaks, illegal mining on cocoa farms, ageing trees and climate-related production risks.

The latest market reaction underscores the continued influence of Ghana’s cocoa sector on global commodity markets despite the country’s declining production.