CropGPT - Cocoa

This week’s cocoa market summary provides a comprehensive overview of developments affecting global cocoa supply, pricing dynamics, and regulatory shifts, with a particular focus on West Africa, the United States, and global trade patterns.

• Ivory Coast: Cocoa shipments since October 1 have reached 1.6 million metric tons, marking a 9.6% year-on-year increase. However, this growth reflects a slowdown compared to the 35% increase seen in December. Concerns over bean quality have intensified during the mid-crop harvest, with up to 6% of truckloads composed of substandard beans—significantly higher than the 1% seen during the main crop. The decline is linked to irregular rainfall, which has adversely affected bean development.
• Ghana: Ghana’s cocoa production forecast has been revised down to 675,500 metric tons, a 5% reduction from previous estimates. This downward adjustment may place upward pressure on global prices due to anticipated supply tightening.
• Global Outlook: The International Cocoa Organization (ICCO) reported a substantial global cocoa deficit of 441,000 metric tons for the 2023–24 season, primarily due to a 13.1% decline in global production. However, projections for the 2024–25 season indicate a possible surplus of 142,000 metric tons, assuming a 7.8% rise in production, which could weigh on future prices.
• United States: Tariff developments have added volatility. A newly implemented 10% tariff on specific cocoa imports initially pressured prices, but subsequent court rulings have blocked several of these measures, easing New York cocoa contract premiums and leading to a softening of U.S. cocoa futures.
• Weather Conditions: Improved rainfall in West Africa has raised expectations for future harvests, though ongoing drought concerns in Ghana and Ivory Coast continue to pose a threat to production.
• Demand Trends: High cocoa prices and economic headwinds have weighed on major chocolate manufacturers, impacting forecasts and raising costs. Nevertheless, recent cocoa grinding data from North America, Europe, and Asia indicates stronger-than-expected demand, suggesting possible price stabilization if demand remains resilient.

This episode presents a structured overview of the global cocoa market for the week ending May 25, 2025, focusing on regional supply trends, weather impacts, production forecasts, and global pricing dynamics.

• Ivory Coast: Cocoa export volumes increased by 10.5% to 1.58 million metric tons since the beginning of the season. However, this growth marks a significant slowdown compared to the 35% increase recorded in December. The deceleration, combined with persistent drought across one-third of the region, raises concerns about future supply. Additionally, mid-crop quality has been negatively affected, with 5–6% of beans deemed substandard due to erratic rainfall. The mid-crop yield is expected to fall to 400,000 metric tons, representing a 9% year-over-year decline, contributing to upward pressure on global prices.
• Ghana: Similar to the Ivory Coast, Ghana continues to face production challenges due to drought. Cocobod, Ghana’s cocoa regulator, has revised its 2024/25 harvest forecast downward by 5% to 675,000 metric tons. These reductions are expected to tighten global supply and support current high price levels.
• Nigeria: The Nigerian cocoa sector is experiencing a resurgence driven by favorable market prices and renewed investment. Cocoa exports surged by 606% from NGN 171 billion in 2023 to NGN 1.2 trillion in 2024. Government initiatives such as the establishment of the National Cocoa Management Board and new large-scale plantation projects aim to scale up production and increase processing capacity.
• Global Demand and Price Dynamics: While major chocolate manufacturers such as Barry Callebaut AG and Hershey Co have revised forecasts downward due to high input costs and tariffs, demand remains relatively resilient. Cocoa grindings in North America, Europe, and particularly Asia declined less than expected, providing some support to prices.
• Market Outlook: Despite current supply concerns, the International Cocoa Organization forecasts a global surplus of 142,000 metric tons for the 2024/25 season, underpinned by a projected 7.8% rise in global cocoa production. This could contribute to medium-term price easing, depending on how weather patterns and policy developments unfold.

CropGPT Weekly Cocoa Market Update

Episode Date: May 18, 2025

Welcome to this week’s global cocoa market summary, brought to you by CropGPT. For comprehensive analysis and data, visit our website where you’ll find full crop health reports, weather archives, pricing dashboards, and earnings call insights.

📍 West Africa: Cocoa Supply Under Pressure

Ivory Coast:

• Mid-crop production is facing difficulties due to delayed rainfall, negatively impacting quality and yield.
• Estimated mid-crop output is 400,000 MT, down 9% from last year.
• Processors are rejecting more beans: 5–6% of truckloads now consist of poor-quality beans, up from 1% during the main crop.
• Exports from Oct 1 to May 11 reached 1.56 million MT, an 11.4% increase YoY — but growth has slowed compared to the 35% pace observed earlier.
• The decline in both quality and output has supported the recent rise in global cocoa prices.

Ghana:

• COCOBOD revised the 2024/25 harvest forecast to 617,500 MT, down 5% from the previous estimate.
• Ongoing production issues add to price volatility, especially as Ghana remains the world’s second-largest cocoa producer.

🌍 Global Supply Trends and Deficit

• The global cocoa deficit for the 2023/24 season is projected at 441,000 MT, the largest in over six decades.
• Global cocoa production fell 13.1% YoY to 4.38 million MT.
• These factors are keeping upward pressure on prices, despite some regional improvements.

📈 Contrasts in Nigeria and Demand Signals

Nigeria:

• Cocoa exports rose 24% YoY to 27,564 MT, injecting a bearish counterweight into the market.

Demand Outlook:

• Cocoa grindings in North America, Europe, and Asia have not declined as much as expected, suggesting resilient consumer demand despite price increases and supply concerns.

📦 Trade & Corporate Reaction

• Companies like Barry Callebaut and Hershey Co. have revised financial forecasts downward, citing concerns over tariffs and potential weakening of consumer demand.

🔮 Looking Ahead: Surplus or Stabilisation?

• The International Cocoa Organization (ICCO) forecasts a shift to a 142,000 MT global surplus in the next cycle, ending four years of deficits.
• A 7.8% increase in production is projected, bringing global output to 4.84 million MT.
• However, the stocks-to-grindings ratio remains historically low at 27, raising continued concerns about long-term supply stability.

🌐 Market Outlook Summary

• A complex global picture is emerging:
  • Supply reductions in Ivory Coast and Ghana continue to dominate.
  • Nigeria's export rebound provides some market balance.
  • Demand remains surprisingly firm.
  • The risk of consumer price resistance and policy-driven shifts (e.g., tariffs) looms.

Together, these dynamics shape a volatile yet opportunity-rich environment for cocoa traders and buyers.

📢 For More Insights:

Visit CropGPT for:

• 20 years of crop and weather data
• Field-level disease tracking
• Cocoa price forecasts
• Satellite and ground survey comparisons
• Full earnings call transcripts and analysis

This podcast delivers only a selection of key highlights. For in-depth reporting, please explore our detailed dashboards and reports online.

CropGPT Weekly Cocoa Market Update

Episode Date: May 11, 2025

Welcome to this week’s summary of the global cocoa market, powered by CropGPT. This podcast highlights key market developments, while our website offers full reports, long-term data, and in-depth analysis.

🇳🇬 Nigeria: Cocoa Revival Driven by Youth and Price Incentives

• Rising cocoa prices since 2023 have attracted a new generation of young entrepreneurs to cocoa farming in Nigeria.
• Example: Anoge Akwa, who transitioned from a previous career into cocoa farming, reflecting a broader movement in the sector.
• Local farmers have seen their economic fortunes transform dramatically thanks to the price surge.
• Cocoa prices climbed to nearly $11,000/MT in 2024, up sharply from the $2,200–$2,500/MT range in 2022.
• The rally has been driven by reduced output from major exporters like Ivory Coast and Ghana.

Despite Nigeria being the fourth-largest cocoa producer, growth potential is restrained by:

• Smuggling of cocoa beans
• Broader economic challenges, though cocoa exports have cushioned the impact of naira devaluation

🇨🇮 Ivory Coast: Mid-Crop Outlook Improves

• The Ivory Coast, the world's top cocoa producer, is benefitting from above-average rains, boosting mid-crop yield forecasts.
• Output is expected to increase through August and September, with strong support from the rainy season (April–November).
• Local conditions (rainfall and temperature) have been ideal, leading to healthy pod development.

📉 Cocoa Tariffs and Corporate Impact

• The recent price spike has triggered concern among major buyers.
• Hershey Co. is actively seeking tariff exemptions in the U.S. to offset rising raw material costs.
  • Without relief, the company estimates up to $100 million in additional costs per quarter in H2 2025.
• Mondelez and Nestlé are also adapting to price volatility by adjusting retail pricing and packaging strategies.

🌍 Macro Trends and Market Strain

• Global cocoa markets remain volatile, with tariff uncertainty stemming from U.S. policy decisions initiated under the Trump administration.
• These tariffs:
  • Vary across cocoa-growing regions
  • Increase operational complexity
  • Threaten consumer demand for discretionary products like chocolate and snacks

📢 For Full Reports and Data:

Visit CropGPT for:

• Crop health dashboards
• 20+ years of weather and yield records
• Cocoa pricing trends
• Smuggling and export flow insights
• Earning call analysis and corporate exposure tracking

Episode Overview:

Chocolate lovers everywhere have been feeling the pinch — and today we unpack why. Cocoa prices have skyrocketed, production is at its lowest in over a decade, and the traditional cocoa supply chain is under immense strain. In this episode, we explore:

• Why cocoa prices hit a historic high of over $12,900 per ton
• The devastating production drop in West Africa, particularly in Côte d’Ivoire and Ghana
• Major threats: aging trees, swollen shoot virus, and climate change
• Why many cocoa farmers aren't benefiting from high prices
• Brazil’s ambitious rise — from collapse to potential world leader in cocoa
• The risks and rewards of Brazil’s new cocoa mega farms
• Latin America’s growing role and Ecuador’s success story
• How climate resilience and farmer-centric approaches are reshaping cocoa’s future
• Three potential scenarios for the cocoa market through 2030

Key Topics:

• The Cocoa Price Surge: Causes behind the record price increases and their global impact.
• West Africa’s Crisis: Aging farms, disease, and climate threats leading to a major production collapse.
• Brazil’s Comeback: How Brazil is planning to double cocoa output through mega farms and agroforestry.
• Risks of Monoculture: Why genetic diversity matters in large-scale farming.
• Farmer-Centric Innovations: New programs in Colombia and Ghana designed to stabilize incomes and promote sustainability.
• Climate Resilience Efforts: Breeding tougher trees, improving soils, and rethinking farming practices.
• The Big Picture: Managed recovery, structural deficit, or overshoot and bust — where is cocoa headed?

Takeaways:

• The cocoa market is at a crossroads — with massive uncertainty about its future.
• Sustainability, resilience, and empowering farmers will be critical to stabilizing supply.
• Latin America, especially Brazil, may redefine the global cocoa landscape.
• Investment, innovation, and global cooperation are urgently needed to secure chocolate’s future.

Global Cocoa Market Update – Week of April 27, 2025

This week's episode delivers an in-depth look at shifting cocoa production dynamics, emerging economic challenges, and evolving global demand trends impacting the cocoa industry.

Key Themes Discussed:

Ivory Coast Export Slowdown and Mid Crop Concerns
Cocoa shipments from Ivory Coast increased 11.3% year-over-year to 1,480,000 metric tons — a stark deceleration compared to the 35% surge seen last December. The upcoming mid crop is forecast at 400,000 metric tons, a 9% decline year-over-year, driven by dry weather. Political instability, marked by the exclusion of opposition leader Tidjane Thiam from elections, adds to market risks.

Ghana's Cocoa Production Challenges Deepen
Ghana, the world’s second-largest cocoa producer, has revised its production forecast downward for the second time this season to 670,500 metric tons. The persistent spread of swollen shoot disease, affecting over 40% of productive capacity, underscores the sector’s structural challenges, with replanting efforts hampered by critical funding shortages.

Brazil’s Ambitious Production Expansion
In contrast, Brazil is pursuing aggressive growth. Through Schmidt Agricola’s large-scale, high-density cocoa plantations, Brazil aims to boost production dramatically, with projections of reaching 1.6 million metric tons over the next decade. While promising, risks around genetic uniformity and disease susceptibility remain.

Global Market Overview: Demand Holds, Pressures Mount
Grindings in major regions such as North America, Europe, and Asia saw less-than-expected declines, suggesting steady demand resilience despite elevated cocoa prices. The International Cocoa Organization projects a global surplus, offering slight relief, but market dynamics remain heavily influenced by regional production risks, supply chain disruptions, and geopolitical uncertainties.

Sustainability and Innovation Trends
Efforts like Luker Chocolates’ sustainable initiatives in Colombia highlight how technology-driven, eco-friendly practices may become key to stabilizing global cocoa production and reducing long-term price volatility.

Strategic Implications:

• Supply Volatility:
  Structural production challenges in West Africa, particularly disease outbreaks and political risks, will continue to shape global supply concerns.
• Emerging Producers:
  Brazil’s scale-up could alter traditional market dynamics, creating more competition for West African cocoa exporters over the next decade.
• Demand Shifts:
  Despite price pressure, resilient grindings suggest strong underlying consumer demand, particularly for premium and sustainably sourced chocolate products.
• Sustainability as a Growth Lever:
  Producers investing in sustainable agriculture and technological innovation may gain competitive advantages in an increasingly ESG-focused market environment.

Venezuela’s cocoa story is one of quality, and quiet resilience. Once celebrated as the world’s largest cocoa producer in the early 1800s, the country’s production today stands at a modest 15,000–20,000 tonnes per year — a mere 0.04% of the global supply.

While volume has plateaued over recent decades, the reputation of Venezuelan cocoa remains unmatched. The cocoa is prized by luxury chocolatiers and specialty markets around the globe — commanding prices double the global averages.

60% of the worlds best cocoa varieties come from Venezuela including Porcelana Criollo, Chuao, and Guasare.

 The Caribbean, once the world's cocoa powerhouse, supplied as much as 70% of global production before West Africa took over in the 20th century. Today, the region contributes less than 5% but has reinvented itself as a hub for fine-flavor cocoa, prized by artisan chocolatiers.

Key Themes Discussed:

A Turbulent Production History
Saint Lucia’s cocoa industry has seen dramatic swings—from prominence in the 1700s to sharp declines in recent decades. Production fell significantly from 110 tons in 2009 to just 17 tons in 2018, highlighting persistent volatility.

The Power of Fine Flavor Status
Despite production challenges, Saint Lucia boasts a rare achievement: 100% Fine or Flavour Cocoa classification by the International Cocoa Organization. Only nine countries globally hold this distinction, positioning Saint Lucia’s beans as a prized asset among artisan chocolatiers.

The Terroir and Trinitario Advantage
Unique volcanic soils, tropical climate, and the cultivation of Trinitario beans contribute to Saint Lucia’s exceptional flavor profiles—chocolates imbued with tropical fruit notes, floral undertones, and rich complexity, setting it apart from mass-market varieties.

Hotel Chocolat’s Transformative Investment
The UK chocolatier’s acquisition of the historic Rabot Estate in 2006 marked a turning point. Through its Engaged Ethics program, Hotel Chocolat pays premium prices to farmers, promotes sustainable practices, and deepens the global appreciation of Saint Lucian cocoa through experiences like their eco-resort and London restaurant.

Challenges to Sustainable Growth
Saint Lucia’s cocoa sector faces aging infrastructure, labor shortages, and the risk of younger generations abandoning farming. These issues threaten both production quality and industry longevity unless addressed through modernization and education initiatives.

The Global Niche Strategy
Instead of competing on volume with giants like the Dominican Republic, Saint Lucia focuses on carving a premium niche market in Europe and North America—catering to consumers and artisans who value origin, flavor complexity, and ethical sourcing.

Building a Sustainable Future
Empowering farmers through training programs, promoting environmental sustainability (like shade-grown cocoa and biodiversity conservation), and preserving genetic diversity are critical steps. Maintaining Saint Lucia’s fine-flavor legacy hinges on balancing growth with the protection of its unique agricultural and cultural heritage.

Strategic Implications:

• Premium Market Positioning: By emphasizing quality and terroir, Saint Lucia can command premium prices and build brand loyalty among discerning chocolate makers.
• Sustainability as a Competitive Advantage: Environmental stewardship and community empowerment are increasingly important to global consumers, enhancing Saint Lucia’s market appeal.
• Storytelling Matters: Elevating the narrative around heritage, ethics, and craftsmanship strengthens Saint Lucia’s position in the specialty cocoa sector.

Overview

• Examination of why cocoa futures in New York and London are diverging in price
• Analysis of underlying factors: quality differences, currency dynamics, market speculation, and oil-related production costs

Market Differentiation

• New York vs. London Cocoa:
  • New York:
    • Trades premium cocoa sourced from Ghana and Ivory Coast
    • Used for artisanal and luxury chocolate production
    • Futures priced in U.S. dollars
  • London:
    • Predominantly supplied by older, lower-quality beans from Cameroon and Nigeria
    • Suitable for cost-effective milk chocolate production
    • Futures priced in British pounds

Currency Influence

• U.S. dollar strengthened by approximately 14% against the British pound from 2023 to 2025
• Stronger dollar increases international attractiveness of New York’s premium beans
• London’s pound-denominated cocoa becomes less appealing as a result

Speculative Trading and Market Strategies

• Speculators and arbitrageurs contribute to the price divergence
• Arbitrage strategy:
  • Purchase lower-priced cocoa in London
  • Improve quality through re-fermentation
  • Sell in New York for a higher price
• Market speculation intensifies the spread between the two exchanges

Quality and Storage Factors

• High-Quality Deliveries:
  • 85% of cocoa deliveries in New York (2024-2025) meet premium standards
  • Buyers pay an extra premium (up to $800 per ton) for superior quality
• London’s Inventory Challenges:
  • Approximately 340,000 tons of cocoa stored that do not meet premium standards
  • Around 40% of stocks held over three years, facing issues like moisture damage and fat bloom
  • Resulting in a discount of $1,200–$1,500 per ton relative to New York futures

Regional Demand Dynamics

• North America:
  • 18% annual growth in premium chocolate consumption since 2021
  • Increased demand for dark chocolate and bean-to-bar products drives up premium cocoa prices
• Europe:
  • European chocolate makers prioritize cost efficiency due to higher energy costs and subdued consumer spending
  • Preference for milk chocolate produced with lower-grade cocoa

Oil Prices and Production Costs

• Rising oil prices affect production costs, including fertilizer and diesel expenses
• Impact on cocoa-producing countries:
  • Depreciation of national currencies
  • Reduced farmers’ purchasing power and lower cocoa yields

Key Event Highlight: September 2024 Squeeze

• A “squeeze” on New York cocoa futures forced hedge funds with large short positions to cover
• Surge in demand from Asian chocolate makers triggered a price rally of approximately $2,400 per ton

Summary & Implications for the Industry

• The widening price differential is a result of quality stratification, currency fluctuations, and energy-linked costs
• Producers may need to:
  • Adopt quality certification systems
  • Reform futures market practices
  • Invest in renewable energy to combat rising oil costs
• The evolving global demand for premium chocolate presents ongoing challenges and opportunities for both cocoa producers and manufacturers

These show notes capture the critical factors influencing the current cocoa market landscape and provide insight into how these dynamics reflect broader trends in agricultural commodities.