Cocoa grindings rebound, prices rise

Processing volumes recover

Global cocoa grindings rebounded in the third quarter of 2026, with Asia posting a sharp increase and Europe recording its first year-on-year rise since 2024, a development that has helped push cocoa prices higher. Data from the Cocoa Association of Asia showed Asia's third-quarter grind rose by 29.22 per cent year-on-year to 233,767 metric tons, the highest for any quarter on record going back to at least 2012. The European Cocoa Association reported that Europe's third-quarter grind increased by 3.2 per cent year-on-year to 348,215 metric tons, marking the first increase from year-ago levels since the second quarter of 2024.

The figures exceeded market expectations. Analysts polled by Bloomberg had anticipated a decline in Europe and only modest growth in Asia, making the stronger readings a notable surprise for traders. The recovery follows a prolonged period of weak processing as record-high cocoa prices in 2024 forced chocolate manufacturers to reformulate recipes, reduce product sizes and pass costs to consumers, leading to a sharp drop in demand. As prices have moderated from those peaks, some of that demand appears to be returning, incentivising processors to ramp up activity. The rebound was also reflected in national data, with Malaysia reporting a 47 per cent year-on-year increase in third-quarter grindings.

For Europe, the year-to-date grind for the first three quarters of 2026 stood at 990,476 metric tons, down from 1.327 million tons in the same period of 2025 and the lowest level since 2015. Despite the quarterly uptick, the longer-term trend remains downward, driven by the shift of processing capacity to origin countries, particularly Côte d'Ivoire. In Asia, year-to-date grind reached 681,900 metric tons, up from 573,000 tons at the same point in 2025 and surpassing the previous high of 673,000 tons in 2022. The record Asian volumes underscore the region's growing importance as a processing hub and a key driver of future cocoa demand.

Implications for West African producers

The processing recovery has direct implications for major producers such as Côte d'Ivoire and Nigeria, which together account for a large share of global cocoa output. Higher grind volumes, particularly at origin, typically support local value addition and can provide more stable demand for beans. Industry data has also pointed to increased processing at origin, with exporter group Gepex in Côte d'Ivoire reporting that it processed 157,446 tons of cocoa in the third quarter, up 40.3 per cent from 112,242 tons a year earlier. This trend towards domestic processing helps origin countries capture more value from the supply chain and reduce reliance on raw bean exports.

For Nigeria, the global recovery comes against the backdrop of structural challenges facing its cocoa sector, including ageing farms, climate-related pressures and the need to meet increasingly stringent market requirements. Compliance with the European Union Deforestation Regulation remains a pressing concern for West African exporters, as non-compliance could restrict access to a key market. Any sustained increase in processing demand will need to be matched by a stable and sustainable supply of beans that meets quality and traceability standards. The rebound in grindings is therefore a positive signal for producers, but translating it into higher farmer incomes will depend on addressing productivity, logistics and sustainability issues across the value chain.

Prices and market outlook

The stronger-than-expected grind data has contributed to upward pressure on cocoa prices, with December cocoa futures rising early in the session following the release of the figures. Market participants had been watching for signs that demand was recovering after the sharp contraction caused by elevated prices. The return to year-on-year growth in Europe, combined with record Asian volumes, suggests that price-sensitive demand is responding as prices ease. However, the market remains sensitive to supply fundamentals, with concerns about weather conditions in West Africa and the long-term impact of disease and climate change on yields.

Looking ahead, attention will turn to North America's third-quarter grindings, due for release from the National Confectioners Association, to complete the global picture. The full set of data will help determine whether the rebound is broad-based or concentrated in specific regions. While the quarterly recovery is encouraging for processors and producers alike, analysts caution that volumes remain well below the peaks seen before the 2024 price surge. A sustained recovery will require a delicate balance between prices, demand and supply. For West African producers such as Nigeria and Côte d'Ivoire, the key challenge is to capitalise on renewed demand while investing in sustainable production to secure long-term market access in an increasingly regulated global market.