Cocoa Prices Climb as Dollar Weakness Spurs Short Covering

Weak dollar and short-covering rally drive up cocoa futures prices

Apr. 10, 2026 at 8:10pm

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A composition of overlapping triangles and circles in shades of brown, yellow, and blue, conceptually representing the volatility and interconnected factors influencing the cocoa commodity market.Geometric abstraction illustrates the complex forces driving recent swings in global cocoa prices.NYC Today

Cocoa prices settled higher on Friday as a weak U.S. dollar prompted short covering in cocoa futures. An excessively short position by funds in London cocoa could add fuel to the short-covering rally. However, ample cocoa supplies, signs of weak chocolate demand, and higher exports from Nigeria are undercutting cocoa prices.

Why it matters

Cocoa is a globally traded commodity that is a key ingredient in chocolate production. Fluctuations in cocoa prices can impact the cost of chocolate for consumers and the profitability of chocolate manufacturers and cocoa producers.

The details

Cocoa prices rose on Friday as a weak U.S. dollar prompted short covering in cocoa futures. Funds have built up a large short position in London cocoa, which could drive further short-covering rallies. However, increasing cocoa supplies, weak chocolate demand, and higher exports from Nigeria are weighing on prices. Drought conditions in West Africa and the closure of the Strait of Hormuz are providing some support to cocoa prices by reducing fertilizer supplies and increasing shipping costs.

  • On Friday, May ICE NY cocoa closed up 2.66% and May ICE London cocoa closed up 2.37%.
  • Last Friday's Commitment of Traders report showed funds boosted their short position in London cocoa to the most in over 8 years.
  • On Tuesday, NY cocoa fell to a 1-month low and London cocoa dropped to a 2-week low as Ivory Coast cocoa shipments increased.
  • Last Wednesday, NY cocoa climbed to a 3-week high as rainfall in West Africa has been insufficient to ease drought concerns.
  • Last month, Ghana and Ivory Coast cut the prices paid to cocoa farmers for the 2025/26 growing season.

The players

Ivory Coast

The world's largest cocoa producer, accounting for over half of global cocoa production.

Ghana

The world's second-largest cocoa producer, also accounting for over half of global cocoa production.

Nigeria

The world's fifth-largest cocoa producer.

Barry Callebaut AG

The world's largest bulk chocolate maker, which reported a 22% decline in sales volume in its cocoa division.

International Cocoa Organization (ICCO)

The intergovernmental organization that raised its global 2024/25 cocoa surplus estimate.

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What’s next

The Ivory Coast and Ghana are expected to announce their cocoa production forecasts for the 2026/27 season in the coming months, which will provide further insight into the global cocoa supply outlook.

The takeaway

Cocoa prices are being pulled in different directions by a mix of factors, including a weak U.S. dollar, short-covering rallies, ample global supplies, weak chocolate demand, and rising exports from smaller producers. The long-term trajectory of cocoa prices will depend on how these competing forces play out.