THE cocoa industry is currently navigating a complex landscape marked by fluctuating prices, supply challenges, and evolving market dynamics. Recent developments have significantly influenced both current market conditions and future projections.
The past year, cocoa prices surged nearly threefold, reaching about US$12,000 per tonne, an unprecedented rise driven by adverse weather conditions, crop diseases, and under-investment in West African cocoa farms, which supply about 80 per cent of the world’s cocoa.
Despite forecasts of improved harvests, production declines in previous years have led to critically low cocoa inventories, thus keeping prices elevated. The rapid increase in cocoa prices has also attracted speculative trading, contributing to heightened volatility.
Entering 2025, cocoa prices have shown signs of consolidation. As at mid-January, prices were slightly lower, hovering above the US$11,300 level. While this indicates some stabilisation, prices remain significantly higher than historical averages, a reflection of ongoing supply concerns.
From a technical perspective, cocoa prices are consolidating within a triangle formation on the daily chart. The upward green trend line coincides with the 50-day moving average of US$10,173 per tonne, which serves as immediate support. A regression analysis from October 2024’s lows to December’s record high suggests that cocoa prices are likely to consolidate around the 23.6 per cent regression level of US$10,666 per tonne.
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Cocoa was expected to end January with a 4 per cent loss, a slowdown in pace, but not a confirmed loss of momentum. Cocoa prices remain sensitive to supply forecasts and geopolitical events. Concerns over slowing cocoa exports from Ivory Coast have helped to support prices by tightening global supplies. However, recent government data revealed that farmers in Ivory Coast shipped about 24 per cent more cocoa in the current harvest season (from October 2024 to September 2025) compared to the same period last year. This increase in exports likely explains the subsequent 5 per cent drop in prices following the release of this news.
Since November 2024, West Africa, particularly Ivory Coast, has experienced a lack of rain and excessive heat. These unfavourable conditions have stalled the development of the mid-crop harvest, with production expected to be no higher than 300,000 tonnes, well below the yearly average of 500,000 tonnes. This anticipated decline continues to underpin cocoa prices. Additionally, long-term factors such as climate change, crop diseases, and under-investment have led to poor harvests and low inventories, sustaining market volatility.
Persistently high cocoa prices have significant implications for the chocolate industry. Major chocolate companies are likely to increase the use of fillers and artificial flavours to reduce cocoa content in their products. This strategy, coupled with expected price hikes, means consumers will see smaller, less cocoa-rich chocolate products. Analysts predict chocolate prices could rise over 10 per cent in 2025, a steep increase compared to previous years.
Looking ahead, cocoa prices are expected to remain volatile. Further price increases are possible if adverse weather conditions continue to impact key growing regions. However, if production in West Africa improves and global supply chains stabilise, a price correction could follow. Industry stakeholders will need to closely monitor these developments to navigate the challenges and opportunities in the evolving cocoa market.
The writer is senior market analyst at Phillip Nova
