Barry Callebaut cocoa outlook – overview
- Barry Callebaut expects El Niño impacts to remain manageable
- Strong cocoa stocks contrast with deficits seen during 2023/24
- El Niño previously coincided with three consecutive deficit years
- Diversified sourcing and blending capabilities strengthen supply resilience
- Industry remains vigilant as weather risks threaten cocoa production
Barry Callebaut has said it does “not expect” El Niño to cause the kind of extreme cocoa market volatility witnessed in recent years, despite The United Nations warning that the weather phenomena is rapidly gaining strength.
What is El Niño?
El Niño is a natural climate pattern, characterised by the unusual warming of sea surface temperatures in the central and eastern Pacific Ocean.
It occurs every two to seven years, when the trade winds that normally blow from east to west weaken, allowing warm water to shift eastwards, triggering widespread disruptions to global weather patterns.
El Niño is a threat to cocoa production as it can cause extreme heat and drought across West Africa, which produces over 60% of the world's supply. These severe conditions stunt pod growth, cause crop-damaging diseases, and restrict overall yields.
“In 2023/2024, El Niño coincided with the main crop and marked the third consecutive year of deficit," said Peter Vanneste, chief financial officer of Barry Callebaut, during the company’s Nine-Month Key Sales Figures for FY2025/26 announcement. “In contrast, today, we’re coming from a position of a strong surplus with ample cocoa stocks entering the new crop year.”
He added that the Swiss chocolate maker, which supplies majors including Mars, Inc, Nestlé and The Hershey Company, had successfully strengthened its resilience to market turbulence through “origin diversification, increased sourcing flexibility and enhanced cocoa bean blending capabilities”, as well as several financial measures.
However, he went on to say that Barry Callebaut is “closely monitoring” developments, indicating that the world’s biggest chocolate supplier remains alert to the potentially damaging impact of adverse weather conditions on cocoa-growing regions.
For chocolate makers already grappling with elevated cocoa prices and ongoing cost pressures, the coming months will be a crucial test of whether stronger fundamentals can shield the market from another period of extreme price swings.
