Global cocoa prices are forecast to rise due to the risk of prolonged supply shortages and rapidly depleting reserves.
From January to April 2024, cocoa prices surged from $4,400 per ton to a peak of $12,000 per ton—far above the 10-year inflation-adjusted average of $3,400 per ton. By May 2024, prices unexpectedly dropped to $7,000 per ton. However, this downward trend is only temporary, as the prolonged cocoa supply-demand imbalance over several years poses a risk of prices rebounding. This could hurt many chocolate manufacturers who had gambled on a sustained decline in cocoa prices, especially as reserves of this raw material continue to dwindle.
According to Forestero, a leading cocoa research company, the global cocoa market faced a deficit of 500,000 tons during the 2023–2024 season. This is the largest shortfall on record and marks the third consecutive year of deficits.
Meanwhile, cocoa inventories in commodity exchanges across Europe and the U.S. have plummeted—from 400,000 tons in December 2023 to just over 100,000 tons currently—the lowest ever recorded.
Depleting reserves are fueling fears of a prolonged supply shortage. This is mainly due to a 13% drop in global cocoa output, as production in Côte d’Ivoire and Ghana—which together account for over half of the world’s supply—has significantly declined.
Many attribute the poor harvest to the warming El Niño weather phenomenon. However, some speculate that a shift to the cooler La Niña pattern might help improve yields in cocoa-producing farms.
Unfortunately, recent data has dashed those hopes. Forestero reported deteriorating pod numbers in key production regions worldwide. The 2024–2025 season is now projected to face a deficit of 160,000 to 200,000 tons, and cocoa stockpiles remain critically low.
However, weather is not the only culprit. Structural issues lie at the heart of the crisis. In reality, new anti-deforestation laws have prevented farmers from expanding their plantations, while a global fertilizer shortage—worsened by the Russia-Ukraine conflict—has led to reduced fertilizer usage. West Africa is also grappling with aging cocoa trees and the spread of viruses damaging young shoots.
The surge in cocoa prices will inevitably lead to higher chocolate prices. Easter egg products continue to rise following last year’s trend, and some manufacturers are shrinking product sizes or promoting alternative ingredients to offset the impact of the cocoa shortage.
Futures contracts rose 7.9% to $9,649 per ton in New York, while cocoa prices in London are also climbing. Diana Gomes, an analyst at Bloomberg Intelligence, stated in a note: “Chocolate could be even more expensive by Easter 2025 if cocoa plant diseases and extreme weather persist.