Cocoa
Cocoa prices have dropped significantly due to decreased consumer demand and increased supply from major producers. Decreased demand is a major factor, as consumers are cutting down on high-priced chocolate. This is partly due to the rising costs of chocolate products, which have increased by 17% over two years. As a result, some consumers have stopped buying chocolate altogether, while others have switched to cheaper brands or private labels.
Increased supply is also contributing to the decline in cocoa prices. Major cocoa producers like Ghana and Ivory Coast are expecting a surge in production. The 2025/26 Ghana cocoa crop is projected to increase by 8.3% to 650,000 metric tons. Additionally, the Ivory Coast reported a 6.8% increase in cocoa shipments to ports from October 1 to July 13.
The International Cocoa Organization (ICCO) forecasts a global cocoa surplus of 142,000 metric tons for the 2024/25 season, with production expected to rise by 7.8% year-on-year to 4.84 million metric tons. This surplus has led to a decline in cocoa prices, with some traders forced to close short positions and others reluctant to enter new contracts due to high costs for end customers.
The fluctuation in cocoa prices affects chocolate manufacturers in several ways. Manufacturers are looking for ways to manage costs, such as sourcing alternative ingredients, optimizing production processes, or passing on costs to consumers. Companies are adopting various pricing strategies, including reducing product sizes or offering cheaper alternatives, to maintain sales volumes.
The rise in cocoa prices has already impacted consumer buying behavior, with 10% of UK consumers stopping buying chocolate and dessert products, and 54% switching to cheaper brands or private labels. The future of cocoa prices remains uncertain, with factors like climate change, disease, and geopolitical issues potentially impacting global supply. Some analysts predict that prices may stabilize with improvements in weather conditions in major cocoa-producing regions.
