Cocoa prices plunge following record highs

Cocoa prices reached a record high of $10.75 (€9.41) per kilogram in January this year. The resulting market shock led to industry-wide panic about the possible ramifications, and saw manufacturers such as Mondelēz International adjust their earnings reports.

The confectionery giant, which owns major chocolate brands including Milka, Toblerone and Cadbury, predicted a 10% drop in adjusted earnings per share (EPS), as a direct result of the spike in cocoa prices.

“This surge was the largest seen in over six decades,” says Nidhi Jain, commodity specialist at WNS Procurement.

And chatter grew over the potential for industry to pivot away from cocoa altogether, moving to more reliable and sustainable ingredients, such as carob.

“Delivering naturalness and simplicity, carob is well-placed to see increased use as a promising, and caffeine-free, cocoa alternative, as seen with Caroboo in the UK,” says Honorata Jarocka, associate director at Mintel.

However, the landscape is shifting back in cocoa’s favour, and prices are finally falling.

Why were cocoa prices so high?

This sharp increase in cocoa prices was driven by concerns over poor weather conditions in West Africa, a major growing region and primary supplier to the European Union (EU).

According to the World Bank, global cocoa production was estimated to have declined by 14% in the 2023-24 season, falling to 4.2mmt, from 4.9mmt in 2022-23.

“This decline is largely due to reduced output in Côte d’Ivoire and Ghana, which together produce nearly 60% of the world’s cocoa,” said John Baffes, senior agriculture economist for Development Economics Prospects Group, at the time.

This was exacerbated by strong seasonal demand, as consumers stocked-up on cakes and chocolates for the festive period, leading to a global deficit.

Cocoa price fluctuations over the past 12 months (source: YCharts)

Why are cocoa prices falling?

Global cocoa production is recovering after poor growing conditions cut yields and put pressure on supplies.

The 2024/25 season is forecast at 4.84mmt. That’s an 8% year-on-year increase. However, this is still below pre-2023 levels, resulting in only a modest surplus of around 142,000mt.

What’s more, farmers in potential growing regions are planting for future cocoa crops.

“Expansion in Indonesia, Nigeria, and Brazil is underway,” says Ben Schräder, market analyst at Vesper.

Cocoa’s volatility

Despite cocoa prices trending down, the commodity remains highly volatile, meaning the reprieve could be short lived.

“The cocoa market is set for continued volatility in Q3 and Q4 2025, as tight supply, historically high prices, and weakening demand converge to create a challenging environment,” says Vesper’s Schräder.

Output in West Africa, which supplies over 70% of the world’s cocoa, remains fragile. Ivory Coast’s mid-crop is projected at just 400,000mt. This is down 20% from the historical norm, due to El Niño-induced weather extremes, swollen shoot virus, and poor bean quality.

And weather remains the biggest wildcard in all growing regions.

Furthermore, political risk is also looming, with Ivory Coast’s October election posing a threat to export continuity.

“With industry cover at just 1–2 months and minimal forward selling, the market is highly exposed to supply shocks-potentially pushing prices back toward $10,000/mt," says Vesper’s Schräder. “Still, if weather holds and output beats expectations, the projected surplus could cap prices closer to $6,500–$7,000/mt.

By contrast, Ghana’s output is expected to rebound to 480,000mt, up from 425,000mt last season, though structural challenges persist - illegal mining, ageing farms, and industry mismanagement.

In short, everything could change.

“The cocoa market heads into Q3 and Q4 delicately balanced, with volatility likely to persist,” says Vesper’s Schräder. “Monitoring mid-crop performance, political developments, and macroeconomic headwinds will be key to navigating this complex, boom-bust cycle.”

Is the tide turning on commodity prices?

Just last week, FoodNavigator reported on falling sugar prices, resulting from increased sugar cane yields in Brazil contributing towards strong supplies globally.

Similarly, the price of olive oil is projected to drop in the coming months as favourable growing conditions have resulted in successful olive crops.