The crisis in the cocoa market is not over: what chocolate lovers can expect
22 April 09:35
Cocoa prices, which have reached record highs in recent years, are finally showing signs of stabilization. The International Cocoa Organization is even forecasting a small global surplus after years of deficits. However, the situation in West Africa, which provides about two-thirds of the world’s cocoa production, remains difficult and unstable. This is stated in the Bloomberg article “Cocoa Market Rush Isn’t Over Yet as Top Producers Fight for Supply”, "Komersant Ukrainian" reports.
Drought, disease, economy…
According to a Bloomberg study conducted in the key cocoa-growing regions of Côte d’Ivoire and Ghana, farmers continue to struggle with numerous problems. Among the main challenges are drought, which leads to wilting of flowers on the trees, illegal mining on agricultural land, and the spread of plant diseases, including the shoot swell virus.
In Ghana, cocoa production this season will be 40% lower compared to the peak four seasons ago. The country’s authorities plan to replant about 500,000 hectares of cocoa plantations (more than a third of the total area), but this requires at least $1.2 billion, which is not easy to raise due to the significant public debt.
Although cocoa prices have almost tripled over the past two years, farmers have not benefited accordingly. This is because the governments of Côte d’Ivoire and Ghana typically sell most of the crop in advance and set fixed prices for producers. This system, which was created to protect farmers from low world prices, now prevents them from profiting from the global rise in cocoa prices.
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Climate change also plays a significant role in the crisis. In Côte d’Ivoire, the effects of the worst windy season in six years have led to the drying up of flowers and a decrease in the number of fruits. Drought is affecting more than a third of the country and half of Ghana, although forecasts indicate that the situation may improve.
Market experts are closely watching the region as trees will soon begin to form fruit for the main harvest, which is harvested in October. This will be a key factor in determining whether the global industry will be able to sustain the volatile cocoa surplus.
People are simply buying less chocolate
Until production is fully restored, the market is adapting due to reduced demand. Chocolate producers warn that prices for their products will continue to rise, especially in the United States, where new tariffs could worsen the situation.
According to Jonathan Parkman, head of agricultural sales at Marex Group, even if the harvest in Côte d’Ivoire and Ghana improves next season, it is unlikely that production will reach the levels seen before the problems with diseases and weather conditions.
For chocolate lovers, this means that the high cost of sweets will remain at least in the short term. Producers will continue to raise prices, and some may reduce the size of bars or change the recipe to save cocoa products. It is expected that market stabilization and price reductions are only possible if the situation with cocoa cultivation in West Africa improves significantly, which requires significant investment and favorable weather conditions.
