Why cocoa prices are falling

Global cocoa prices are retreating sharply after months of historic highs, easing below $4,000 per metric ton in recent weeks as improving supply conditions and weaker demand trigger the market
The shift marks a significant reversal from 2024 levels when cocoa prices surged to their highest price in over 40 years on the back of poor harvests in Cote d’Ivoire and Ghana — top global cocoa producers, climate disruptions and structural supply tightness.

Market data show that the recent decline is driven by stockpiles in major producing countries and softening global demand for chocolate products.

Adeola Adegoke, national president of Cocoa Farmers Association of Nigeria (CFAN), told BusinessDay that prices of cocoa over the years have been fluctuating through the law of supply and demand, especially where consumers dictate the price with finished product power and consumption mileage.

We must realise that cocoa market has been managed by unknown forces at the international market (London market) who determine cocoa prices without considering the investment in it like inputs and labour cost before arriving at the actual market price that neither considers the total investment cost of the cocoa beans produced,” he said in response to questions. 

In Cote d’Ivoire, the world’s largest cocoa producer, beans from the main harvest are reportedly piling up in warehouses as international buyers, especially chocolate manufacturers, are cautious of buying without having a market to sell to. 

Just recently, Ghana, the second-largest producer, adjusted its farmgate cocoa prices in response to the falling international market, a move aimed at aligning local pricing with global realities and sustaining export competitiveness.

Adegoke added that cocoa buyers around the world have not been happy with the 2024 surge which greatly affected their liquidity and compelled them to look for more funding to be able to stay in the market due to a high capital that required them to buy the commodity at the farm gates level. 

“For example, the funding that is needed to purchase 5 tons of cocoa was used to buy 1 ton during the 2024/25 January cocoa season. Many of them (manufacturers) complained seriously at the time because they could not afford to stay in the market due to the high capital needed to stay afloat,” he explained. 

Prices of cocoa have slipped by over 70 percent since historic highs in 2024, to an average of $3,613 per ton, according to data from the International Cocoa Organisation. 

Low demand is compounding the decline

After the 2024 price spike, chocolate manufacturers raised retail prices to offset higher input costs. 


However, this move has affected the demand of chocolates in Europe and America as consumers could not afford the costs. Some processors have reported slower sales growth despite lower recent cocoa costs, reflecting softer consumer appetite amid broader cost-of-living pressures.


“This reflects a historic increase in the cost of doing business and a decline in cocoa bean availability, which has weakened industrial demand in an environment where cost pass-through is often limited by supermarkets and retailers,” Tracey Allen, agricultural commodities strategist at J.P Morgan, said in a J.P Morgan blog post. 

For cocoa farmers in Nigeria, with the recent fall in prices, experts warn that this could squeeze profit margins, especially as input costs remain high, and discourage farmers from continuing in cocoa cultivation. 


Nigeria currently produces roughly 280,000/300,000 metric tons of cocoa and is the fifth global producer of the bean, but Adegoke of CFAN warns that, “we are heading for serious problems as our cocoa farmers have vowed to cut down their cocoa trees and replace it with other viable alternatives crops or commodities if the downturn in cocoa prices continues and no assurances that their investment will be protected.”


The value chain is surrounded by ageing plantations and low yields. Also, climate variability remains a long-term risk factor stalling cocoa production. 


Way forward in Nigeria

The Federation of Cocoa Commence (FCC), a body that provides standards and training for international cocoa trade, Adegoke notes, should be consulted to explain their role in this current market situation that has almost destroyed all the gains recorded so far in the sector.


Similarly, CFAN has been pushing for the reinstatement of the Cocoa Board Bill to help regulate and harmonise practices in the value chain.

There has been a joint and sustained demand for the reintroduction of a Nigerian Cocoa Board to regulate the sector, coordinate development efforts, and drive Nigeria’s cocoa sustainability growth,” Adegoke said. 


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