The cocoa market that investors and operators are navigating today looks nothing like the one that defined the past two years. At the start of 2026, New York cocoa prices surged above $6,000 per metric ton at their peak, before correcting significantly in recent months. London cocoa followed a similar trajectory, rising to around £4,500 per ton before easing back toward the mid £2,000 range. The scale of this repricing is significant, and did not happen without cause.

In commodity markets, a principle that experienced traders know well is that: high prices cure high prices, and low prices cure low prices. What played out in cocoa across the past several months is a textbook expression of that dynamic. Sustained periods of exceptionally high prices fed through into higher chocolate prices at the consumer level, and that eventually began to damage demand. When the market started receiving clear signals that the demand side of the equation had been meaningfully weakened, prices responded accordingly. The result is a market now sitting at two-year lows, searching for its footing. Adding pressure to that picture, major origins particularly Ivory Coast and Ghana found themselves carrying significant stock in a falling price environment. As they worked to move those inventories, their pricing adjustments compounded the broader market weakness. The H1 story is fundamentally one of demand destruction. For investors watching this environment, the question of how SFI Agri have responded matters. Both organisations moved with discipline. Inventories were reduced. The approach to selling became more strategic, with greater attention paid to timing and placement. Rather than chasing volume in a weakening environment, the priority was to manage exposure carefully and preserve the flexibility to act when conditions improve.

On the risk management side, work is underway to build more robust futures trading capabilities and hedging mechanisms a deliberate investment in the infrastructure that protects against sharp price movement in either direction and positions the business to act on market signals when they emerge.

Looking ahead to the second quarter, the honest assessment is one of cautious optimism tempered by realism. The demand environment remains uncertain, and buyers across the supply chain are still working out how lower price levels will translate into renewed consumer activity. The expectation is that as chocolate pricing begins to reflect the fall in raw cocoa costs, consumer demand will gradually recover and that recovery will work its way back up the supply chain. That process takes time. It is not something that reverses in a single quarter.

One development worth noting as a constructive signal is the return of carry to the market. In the high-price environment of recent years, the market was inverted making storage commercially costly and discouraging inventory build. With the repricing that has taken place, carry has returned, making it more commercially viable to hold inventory and plan around longer time horizons. Stocks are building in both the United States and Europe as a result, consistent with the surplus the market is now working through. That surplus estimated in the range of 200,000–300,000 metric tons for 2026 is a real feature of the current landscape and will continue to influence how the market trades through the year.

For Q3 specifically, price levels are expected to remain relatively stable around current levels. The mid-crop period is traditionally a slower time of year for cocoa known in trading circles as the “silly season,” a stretch that historically trades more bullish than bearish due to reduced supply-side noise. Given how significantly the market has already repriced, a dramatic move in either direction seems unlikely. The more probable outcome is a period of consolidation as the broader supply chain continues to assess the demand picture.

Beyond the immediate mechanics, SFI Agri is looking further ahead. Expanding into new origins and deepening the footprint in existing markets including Nigeria remains a clear priority. The relationships being built, the risk management capability being developed, and the strategic discipline being applied in a difficult environment are not just defensive measures. They are the foundation on which stronger positioning is built when conditions normalise.

The cocoa market is going through a genuine recalibration, and that is not a comfortable process for anyone operating within it. For investors and strategic partners, however, the more important question is not where prices are today. It is whether the market and the operators within it are building the capacity to navigate the next cycle with greater precision than the last. The groundwork being laid now will answer that question when the market turns.