This episode provides a concise briefing on the evolving conditions in the global cocoa market as of January 19, 2025.
With production forecasts under pressure, smuggling concerns rising, and global stockpiles hitting historic lows, the cocoa sector is facing intensified supply chain risks and volatile market dynamics.

Key Themes Discussed:

Ivory Coast Production Adjustments and Smuggling Risks

• Ivory Coast has revised its cocoa production forecast upward to between 2.1 and 2.2 million metric tons, responding to shifting environmental and economic pressures.
• However, crop quality is under strain from heavy rainfall, flooding, and heightened disease risk.
• Cocoa smuggling to Guinea and Liberia has surged, with an estimated 50,000–75,000 metric tons illegally exported since the start of the season, distorting local pricing and threatening global supply chain stability.

Ghana’s Production Setbacks

• Ghana’s Cocoa Board has cut its 2024–25 production forecast to 650,000 metric tons, down from 700,000, citing poor weather and widespread disease.
• The country is expected to record its lowest harvest in 23 years, impacting regional economic stability and global supply balance.

Nigeria’s Export Surge Offers a Stabilizing Influence

• Nigeria’s cocoa exports rose by 35% year-on-year in November, reaching 38,015 metric tons.
• Despite environmental challenges like Harmattan winds, the increase provides a partial counterbalance to broader West African production declines.

Brazil’s Cocoa Processing Decline Reflects Demand Erosion

• Brazil’s cocoa processing dropped 5.5% year-on-year to 59,589 metric tons in the latest quarter, highlighting early signs that elevated cocoa prices are beginning to curb global consumption.

Historic Supply Deficit and Tightening Global Stocks

• The International Cocoa Organization has revised its 2023–24 global cocoa deficit estimate upward to 478,000 metric tons—the largest on record.
• Global cocoa production is projected to fall 13.1% year-on-year, while global stockpiles have plunged to their lowest levels in two decades.
• Export bottlenecks, particularly from Ivory Coast, are compounding supply tightness.

Strategic Implications:

Deepening Supply Chain Risks

• Smuggling, crop disease, and adverse weather continue to strain cocoa supply chains, exacerbating the current global deficit.

Sustained Price Volatility

• With consumption beginning to slow but supply pressures intensifying, cocoa prices are likely to remain elevated and volatile into 2025.

Inventory Management Pressures

• Major chocolate companies, including Hershey, are aggressively securing cocoa through futures contracts to manage supply risk, placing additional stress on already shrinking certified cocoa stocks.

Structural Reforms Needed

• West Africa’s ongoing production and regulatory challenges signal an urgent need for investment in sustainability, traceability, and crop resilience programs