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Cocoa prices reach an all-time high

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Cocoa futures have been rallying for months now and just as you thought that prices could not go any higher, they moved up another notch. This week they hit an all-time high of $7,974 a tonne, up 35% since the start of the year and a staggering 132% higher than a year ago. Sugar prices also rallied over the last few months but by a more moderate 16% year-on-year.

Here at the Armchair Trader we have been warning for months that disease and weather issues will create a shortage of cocoa supplies this year. Infestation with the swollen shoot virus in Ivory Coast and black pod disease in Ghana have not only affected the size of the crop but also the quality of the harvested cocoa pods, which were smaller than usual. Things were made worse by an inordinate amount of rainfall during the growing season, twice the 30-year average amount of rain for West Africa.

Data from Ivory Coast ports showed that the country shipped 1.22 metric tonnes of cocoa in the six months since October 2023 which is nearly 30% lower than in the same period in the last growing season. Local Ivory Coast cocoa regulators expect that the country’s mid-crop which starts in April will also be 33% smaller on the year at around 400,000t.

Cocoa analysts expect the overall global cocoa production this year to come in between 10% (at the conservative end) and 22% below 2022/2023 levels while the International Cocoa Organisation forecasts that the cocoa market will end up in 374,000t deficit compared with a 74,000t deficit in 2022/23.


The current production crisis, while acute, is masking some chronic issues with cocoa growing in these two countries, namely insufficient investment in farming infrastructure and aging cocoa trees. The least discussed but potentially most problematic issue is that Ghana and Ivory Coast have problems recruiting younger workers. Harsh working conditions and low wages have resulted in an exodus of the work force from the countryside to the cities and turning that tide would require spending more money on production.

Chocolate prices to rise

On the consumption side, the cost increases have yet to make it through the supply chain.

“Although chocolate costs are yet to surge, largely due to major chocolate producers having purchased the commodities in advance and stocked inventory, prices are likely to increase ahead of Easter,” said Nidhi Jain, commodity specialist at analytics firm The Smart Cube.

“This is because chocolate producers have failed to restock inventory, anticipating cocoa and sugar prices to drop. In fact, the opposite has happened, with cocoa’s value continuing to rise further and further. As the supply of both commodities dwindles, chocolate makers are expected to raise prices accordingly, passing rising costs onto consumers prior to Easter.”

She noted that like cocoa, global sugar prices have risen considerably in recent months. Here the cause was the El Niño weather pattern which created dry conditions in India and Thailand – two of the global top five sugar producers. Sugar output in India and Thailand is expected to decline by an estimated 10% and 32%, respectively, in the marketing year 2023/24 which started in October last year.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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