What You Need to Know
Global cocoa prices have fallen by approximately 10%, reaching their lowest levels in two and a half years. This decline is attributed to increasing stockpiles in Ivory Coast, the world’s largest cocoa producer, and rumors of full warehouses causing delays in exports. Despite a gradual return of buyers, the market remains under pressure as producers face challenges in maintaining profitability.
Africa-Press. Global cocoa prices have dropped by approximately 10%, reaching their lowest levels in two and a half years amid reports of rising unsold stockpiles in Ivory Coast, the world’s largest producer of this crop.
Traders noted rumors that cocoa warehouses in Ivory Coast are full of beans, and long lines of trucks are unable to unload due to the very low export quantities of this essential chocolate ingredient.
A trader commented, “(Industrial buyers) are gradually returning to the market, but they cannot provide sufficient support.”
Cocoa futures on the London exchange, which serve as a benchmark for pricing cocoa worldwide, fell to their lowest level since mid-2023 at £2,234 per ton ($3,015.9) earlier in the session, declining by 6.7% to £2,309 per ton ($3,117.15) during today’s trading.
Cocoa futures in New York also hit their lowest level since mid-2023 at $3,189 per ton before recovering to $3,265 per ton, but still down by 5.8%.
Reuters reported unnamed sources stating that Ivory Coast is considering lowering the guaranteed price paid to cocoa farmers, despite the country’s cocoa regulatory body confirming this week that it would keep the price unchanged until the end of the main harvest season on March 30.
Last week, Ghana, the second-largest cocoa producer in the world, reduced the guaranteed price for farmers by a third in an effort to revive sales and provide funds for farmers who claim they have not received payments since November.
Why Aren’t Consumers Feeling the Drop in Chocolate Prices?
Producers and analysts expect that cheaper cocoa will start reaching supermarket shelves in the second half of this year, but even this is uncertain, meaning that families already struggling with rising food prices, from meat to coffee, will have to seriously consider whether chocolate remains affordable, according to a report published by Bloomberg last December.
Cocoa prices surged to a record high of nearly $13,000 per ton in 2024 due to crop damage in Ivory Coast and Ghana, which produce over half of the world’s cocoa, caused by pests and severe weather conditions.
This increase has had a profound impact on the cocoa industry, prompting everyone from canned food companies to small artisan chocolate makers in Europe and the United States to secure sufficient cocoa supplies and balance costs with profits, with some finding themselves struggling to survive.
According to Bloomberg, these companies will not rush to lower retail prices while producers attempt to recoup some of these lost revenues and profit margins.
Cocoa prices have experienced significant fluctuations over the years, influenced by various factors including weather conditions, pest infestations, and global demand. In 2024, prices soared to record highs due to adverse conditions in major producing countries like Ivory Coast and Ghana, which account for over half of the world’s cocoa supply. This volatility has led to increased scrutiny on pricing strategies and the sustainability of cocoa farming.
