The cocoa market remains volatile due to the global scenario.

The global cocoa market remains under pressure amid an adverse macroeconomic environment, marked by the escalating conflict between the United States and Iran, which has raised the global risk premium and directly impacted energy, freight, and insurance costs.

Meanwhile, weather factors and the global commodity balance remain on the radar. For the 2025/26 crop year, Hedgepoint Global Markets projects a surplus of around 356 tons, slightly below the previous estimate, resulting from a partial recovery in production combined with a contraction in demand.

Despite the positive balance, the market remains sensitive, as changes in fundamentals could significantly alter this equilibrium, especially given the increased probability of an El Niño event.

According to Carolina França, Market Intelligence analyst at Hedgepoint Global Markets, the macroeconomic scenario has exerted a significant influence on market behavior. "Disruptions in the Strait of Hormuz and increased insecurity in the Red Sea have reduced traffic through strategic routes such as the Suez Canal, increasing freight and insurance costs and affecting global logistics," she explains.

This context also puts pressure on energy and fertilizer costs, especially nitrogen fertilizers, increasing inflationary risks and adding volatility to an already sensitive market.

Demand shows uneven behavior across regions.

On the demand side, Asia showed positive signs in the first quarter of 2026, particularly Malaysia, whose sugarcane crushing grew by 8,7% during the period, exceeding expectations.

This movement was reflected in a 5,2% increase in Asian sugarcane crushing as a whole, a region that accounts for about 23% of global processing. In contrast, Europe recorded a 7,8% drop in crushing, pressured by historically low net imports, while the United States also showed a decline in processing.

In Brazil, the industry faces additional challenges, such as import restrictions, changes to the drawback system, and regulatory uncertainties, in a scenario of a slight decrease in milling in the first quarter.

Global supply and climate change increase uncertainties for the 2026/27 cycle.

In terms of supply, the main producing countries are going through a critical phase of the agricultural calendar, between the mid-season crop and the flowering that will give rise to the main 2026/27 crop.

In the medium and long term, the increased probability of the El Niño phenomenon occurring is one of the main points of concern for the market.

“Projections indicate that the event could extend until the end of 2026 and the beginning of 2027, increasing the risks for agricultural commodities in a context of possible record temperatures. Analysis of past harvests indicates that El Niño does not present a direct and homogeneous relationship with rainfall volumes or production levels, generating distinct effects between origins and often lagging in time. These impacts reflect the perennial nature of cocoa and its interaction with regional climatic conditions, potentially resulting in both punctual losses and subsequent positive adjustments. In general, the phenomenon increases production risk and requires continuous monitoring,” highlights Carolina França.

A surplus below the previous projection does not eliminate short-term volatility.

For the 2025/26 crop year, the global cocoa balance points to an estimated surplus of around 356 tons, slightly lower than the previous projection. According to Hedgepoint's analysis, this result does not stem from strong supply growth, but from a partial recovery in production combined with a contraction in demand.

"Changes in any fundamental aspect can significantly alter this balance," concludes the expert.