Cocoa falls more than 40% amid waning drought concerns, increasing harvest

ISTANBUL

The highly volatile price of cocoa declined over 40% in global markets as drought concerns eased in West Africa and harvest increases.

The ton price of cocoa dropped below $7,000, declining more than 40% since the end of 2024. Estimates of increased supply and weakening demand led to sharp declines.

Production forecasts in West Africa, which point to an increase due to rainfall, have eased drought concerns, while a rise in cocoa tree blossoms has kept prices under pressure.

High cocoa prices and US tariffs could lead to a decrease in demand for chocolate, further pressuring the cocoa market.

Analysts estimate that production in the upcoming season will increase, and even if there is an upward movement in the short-term price, the overall price trend of cocoa appears to be downward.

Last year, cocoa prices reached a record high of $12,931 amid concerns about supply. Adverse weather threatening crops in West Africa and falling global stocks contributed to the rise.

Weak production in the Ivory Coast and Ghana played a key role in the record highs.

Ivorian exporters reportedly rejected the cocoa beans due to poor quality, which could negatively affect the global supply. The decline in harvest in the Ivory Coast had thus pushed up prices.

Large cocoa factories in the Ivory Coast and Ghana decided to cut or halt production due to high seed costs. Prolonged drought and heavy rain were among the main reasons for supply issues but plant diseases like the CSSVD virus also contributed to the trend.

Zafer Ergezen, a futures and commodity markets expert, told Anadolu that cocoa prices rose significantly last year and the first half of this year due to a decline in West African cocoa harvests, as it accounts for 70% of global cocoa production.

“The Ivory Coast and Ghana make up 60% of the production in West Africa, so the infestation of cocoa trees in this region led to significant rises in price, for instance,” he said.

Ergezen stated cocoa yields are expected to rise this year compared to last year, which would translate to a rise in supply.

“Rising cocoa yields particularly put pressure on prices,” he said. “I expect the downward trend will continue so the sales pressure will keep up in the coming period.”

Oran van Dort, a commodity analyst at Rabobank, told Anadolu that a significant oversupply of cocoa is expected for the 2025/2026 season due to a recovery in production and continued downward demand.

He stated Ecuador, Brazil, Peru, Nigeria, and Cameroon showed strong growth in 2024/2025, expecting it to continue, while production in the Ivory Coast and Ghana is expected to recover.

He noted the falling demand has been slower than expected, but it will continue throughout the next year, while cocoa is expected to show a gradual downward trend in the short and medium term due to surplus estimates.

Dort added that cocoa prices are likely to remain high versus the pre-2023 levels, as cocoa is not likely to fall below $3,000 per ton due to expected supply constraints in the Ivory Coast and Ghana.