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'Yet, we expect prices to trend generally lower from a high base this year as global output potential remains above 2023/24 levels, although not by much.'
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The future of chocolate prices worldwide remains unpredictable, as analysts predict cocoa prices will remain volatile throughout 2025.
Leeuwner Esterhuysen, senior economist at Oxford Economics Africa, said West African output projections heavily impact international cocoa market developments.
“Although production is broadly anticipated to rebound in Côte d’Ivoire and Ghana, cocoa farming in these countries remains heavily exposed to changes in weather or the spread of pod diseases.”
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Cocoa projections
According to estimations by the International Cocoa Organisation (ICCO), global production fell by 11% during the 2023/2024 season.
This decline was largely brought on by lower output in Côte d’Ivoire (-25.3%) and Ghana (-19.0%), the world’s two largest producers.
“Production in the third-largest producer, Ecuador, declined by a lesser extent (-5.3%). Elsewhere in Africa, production in Nigeria (+11.1%) and Cameroon (+18.5%) increased last season.”
Cocoa farming
Esterhuysen said as a result, Côte d’Ivoire’s share of global production fell to 37% last season from 44% during the 2022/23 season, while Ghana’s contribution dipped by 1 ppt over the same period to 12%.
The shares of Nigeria and Cameroon both increased by 2 ppts to 8% and 7%, respectively. Yet, Ecuador remained in third place at 10%.
He added that during the 2023/24 season, cocoa farming in Côte d’Ivoire and Ghana was ravaged by unpredictable weather and pod disease.
“This caused global prices to surge, incentivising farmers in less restricted markets, like Cameroon and Nigeria, to invest more in cocoa farming.
“Conversely, Ivorian and Ghanaian farmers are subject to predetermined farmgate prices, preventing them from capitalising on intra-season price swings.”
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The future of cocoa
He said the ICCO’s outlook for the 2024/2025 season is promising. Global output is projected to increase by 7.8%.
“This projection hinges largely on expectations in West Africa, as output in Côte d’Ivoire (+10.5%) and Ghana (+13.2%) is forecast to rebound somewhat.
“Even if these predictions materialise, Ivorian production will remain 17.4% below 2022/23 levels, while Ghanaian production will still be 8.3% lower than two seasons ago.”
Concurrently, the ICCO expects cocoa grindings (used as a proxy for demand) to dip by 4.8% due to high prices.
“If these projections materialise, the global market will record a slight surplus of 142 000 tonnes following three successive seasonal deficits.”
Farmers’ profits remain constrained
Esterhuysen said Ivorian and Ghanaian farmers are not incentivised to invest in climate-resilient farming practices, and farmgate prices constrain their profits.
Therefore, production prospects are subject to sudden adjustments.
“Farmers in Cameroon and Nigeria can fetch up to three times as much as their West African peers, resulting in greater investment in the industries in these smaller cocoa-producing nations.
“The global cocoa market remains strained by reduced liquidity amid depleting stockpiles.”
What will set prices off?
He added that any positive or negative signalling in the market would set prices off in whichever direction, as speculative trading typically increases when uncertainty increases.
“Yet, we expect prices to trend generally lower from a high base this year as global output potential remains above 2023/24 levels, although not by much.”
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