KUALA LUMPUR — The global cocoa market is expected to experience its first supply deficit in three years during the 2026-27 season, driven primarily by the impact of a strengthening El Niño weather pattern, according to Brandon Tay Hoe Lian, CEO of Guan Chong Bhd, Asia’s largest cocoa processor.

Speaking at the CAA International Cocoa Conference in Singapore, Tay projected a shortfall ranging from 300,000 to 400,000 tonnes in global cocoa production. This marks a significant shift from the prior season, which saw a surplus of approximately 100,000 tonnes. The anticipated deficit is attributed to adverse weather conditions in major cocoa-producing regions, which are likely to impede crop yields just as demand stabilizes after recent fluctuations.

The global cocoa supply outlook has been turbulent in recent years. Before the current surplus trend, the market experienced three consecutive years of deficits caused by poor harvests, mainly in West Africa, where a substantial portion of the world’s cocoa is cultivated. These earlier shortfalls resulted in record price increases, with New York futures rising above US$11,000 per tonne in late 2024.

While the cocoa market has seen a second consecutive annual surplus recently, the impending El Niño event raises concerns for a return to tighter supply conditions. Industry participants remain cautious, noting that weather-induced production risks could challenge the balance between supply and demand during the coming season.

These developments underscore the vulnerability of the cocoa industry to climatic variability, which has historically influenced global prices and availability. Market watchers will be closely monitoring weather patterns and crop reports in key growing areas over the coming months to assess the evolving supply situation.