2025 Cocoa Recap

Introduction 

2025 was a tumultuous year for cocoa markets. Following the huge shortage of 2024, which led prices to reach their highest level in history, in the last year we saw a completely different picture, as the apocalyptic scenario of cocoa bean extinction did not materialize. Instead, traders were hit by a production rebound, while demand plummeted to its lowest level in almost a decade. 

As a result, cocoa did not carry on its dream of ever higher tops, but fell back to levels not seen in over a year. In this blog, we will revisit all the main events and trends that plagued cocoa markets last year, from West Africa’s partial recovery to the rise of South America as a cocoa powerhouse, as well as the scorched land that cocoa consumption became. We will also understand how all these events impacted prices and were impacted by them. 

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Taking all these factors into account, we also have a better grasp of what to expect from 2026 and are better equipped to deal with the challenges and bumps ahead, which promise to be many. 

The First Fall 

As we mentioned, 2024 was an unprecedented year for cocoa, as the West African shortage hit the two biggest producers in the world, Ivory Coast and Ghana, which at the time were responsible for over 60% of the global cocoa supply. Such an event not only increased volatility dramatically, but also led prices to rise beyond anything we had ever seen before, surpassing $12,000 MT. 

As euphoria took hold of the markets, many believed 2025 would continue what 2024 started, leading prices even higher as cocoa supply continued to drop. There were strong arguments for that thesis, as many pointed out that the supply problems in West Africa were not caused only by a stroke of bad luck, but were instead the consequence of a structural context that could not be easily solved. Beyond that, bullish believers also argued that cocoa supply is strongly inelastic, as cocoa trees need at least four years to grow, suggesting we should not expect a production boost any time soon. Finally, they pointed out that cocoa demand also tends to be inelastic, as many studies on the price demand inelasticity of chocolate suggest. 

The first setback to this thesis came at the end of January, as cocoa prices fell sharply, from over $12,000 MT to just $8,000 MT. The main cause of this drop was improved expectations regarding the 2024/25 season, as both Ivory Coast and Ghana showed signs of recovery in their cocoa production. 

Price Recovery 

Even then, cocoa bulls did not lose their spirits, as many believed this was just a short term correction, which was inevitable for any market that had rallied so much in such a short time frame. Many even compared cocoa’s situation with Bitcoin, arguing that those steadfast enough to endure the volatility would be greatly rewarded in the end. 

For a moment, these speculators were proven correct. After two months of almost uninterrupted decline, cocoa prices started to recover by the end of March, rising from $8,000 MT to $11,000 MT. Although a new all time high was not reached, this rally was enough to fill the hearts of cocoa bulls with hope. 

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Once again, the reason behind the market’s movement was West Africa. Despite the recovery, cocoa production in Ivory Coast and Ghana was still below average, as neither country was able to reach the figures they were previously known for. Not only that, but early signs suggested we would see a particularly bad mid crop, which had just begun in April. While most mid crops are responsible for around one third of the Ivorian main crop, early estimates suggested the 2024/25 mid crop might not even reach one quarter of it. 

Nobody is Buying it 

In the end, the bulls’ hope proved to be short lived. While markets were focused on supply and on what could happen in West Africa, a different crash was brewing below the surface. For a while, the cocoa rally’s impact on the real economy was somewhat limited, as chocolate companies are used to hedging their cocoa exposure. That said, hedges can only last so long, and by 2025 most producers were already facing unprecedented costs, leading them to adopt a range of measures, such as reducing product sizes, changing ingredients and, of course, increasing prices. 

This marked the end of the bulls’ second belief, that cocoa demand was inelastic in relation to prices. Although most economic literature indeed points in that direction, there is no such thing as zero elasticity, but rather different degrees of it, which can be higher or lower. When chocolate prices rose as sharply as they did, there was only so much that low elasticity could offset. 

Signs of this started to appear as early as May, as markets observed the first indications of weak demand. The real blow, however, came in July, when the Q2 cocoa grinding figures were released. The numbers were staggering. Europe, the world’s largest chocolate consumer, saw its grinding figures fall 7.2% year on year, reaching the lowest level since 2020. Asia fared even worse, as grindings fell by over 15%, to their lowest level in nine years. Together with North America, these results led total quarterly grindings to drop by 9.2%. 

As markets realized the scale of the problem, cocoa prices reacted, falling below $7,000 MT by October. When the Q3 grinding figures were released later that month, showing that weak demand was not just a temporary phenomenon, prices fell even further, to $6,000 MT. 

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The Newcomers 

Cocoa markets reached the last quarter of the year in a very poor mood. As the 2025 26 season began, most people expected further recovery in West Africa, which would deliver the final blow to the bulls. 

Once more, the actual outcome took markets by surprise. Despite positive expectations, Ivory Coast arrivals started the 2025/26 season with very weak results, showing figures well below those of 2024/25 at the same point and in some cases even below what was seen during the 2023/24 shortage. This outcome was driven by several factors, such as farmers hoarding beans amid election related uncertainty in Ivory Coast and expectations of higher farmgate prices. Although arrivals did recover later on, they reached at most the same level as in 2024/25, suggesting that even if there is a recovery, it may not be as strong as markets had expected. 

This development could have been enough to give prices some breathing room, were it not for the rise of South America, which had previously been seen as a minor player in cocoa markets. Led by Ecuador, which has broken record after record in cocoa production, the Western continent saw its crop grow by leaps and bounds, surpassing 1,500 MMT in the 2024/25 season. 

Ecuador in particular increased its production in a way that can only be compared to West African countries in the twentieth century, rising from 360 MMT in 2020 to almost 600 MMT in the previous season. Expectations for the current season are even higher, with some suggesting that the South American country might surpass Ghana and become the world’s second largest cocoa producer. 

Combined with the continued pressure from weak demand and hopes for a better mid crop in West Africa, this new source of cocoa pushed prices even lower in the final months of 2025, reaching a yearly low of $5,000 MT. Although prices recovered somewhat afterward, they ended the year at around $6,000 MT, far below the highs seen twelve months earlier. 

What Lies Ahead 

Amid turbulence and many surprises, 2025 has come to an end, in a year that can only be described as a roller coaster for cocoa markets, possibly the most intense commodity market of all. Now, attention turns to 2026 and what the future may hold. 

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Whether good or bad, we can expect a lot. For starters, none of the demand problems have been resolved. Although cocoa prices have fallen sharply, they remain at least twice as high as they were before the shortage. At the same time, increasing chocolate prices is far easier than reducing them, as market structures have already adapted to the new environment, with different chocolate recipes, suppliers and cost bases, alongside general inflation, which continues to push prices higher. Even if chocolate prices do decline, the move will be nowhere near the hikes seen in 2025, and any demand recovery is likely to be similarly limited. 

On the production side, expectations remain high for West Africa. Even if a full recovery is not achieved, all signs suggest we should at least see a better mid-crop than in 2024/25. Combined with booming production in South America, this should be enough to secure a substantial surplus this season. Of course, it also means that any imbalance could trigger a new price rally. 

In the end, for a market as unique as cocoa, the only thing we can truly expect is a great deal of emotion on the horizon. 

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