Cacao bean prices escalate globally once more.
Bold cocoa prices surge above $11,000 per ton, smashing records
Say goodbye to that cheap chocolate! Cocoa prices are reaching new heights, breaching the $11,000 per ton barrier for the first time since February 4. This jaw-dropping revelation stems from data gathered at the London ICE Futures exchange.
At 16:42 Moscow time, the price for the nearest (July) cocoa bean futures contract skyrocketed by 5.9% to an astounding $10,862 per ton. By the end of the trading day, the highest recorded price soared to a staggering $11,058, according to Prime.
Since the beginning of the month, the cost of cocoa beans has skyrocketed by a whopping 23%, and in April, growth approximated a mind-boggling 12.5%. However, for the past three months, the exchange price of cocoa beans had been sinking, leading to a devastating drop of a third during the first quarter.
Last year, cocoa beans reigned supreme as the world's most expensive commodity, with prices spiking by a whopping 181% over the course of the year and dramatically exceeding the $12,000 level. This astronomical increase was a direct result of multiple years of deficits caused by drastic weather conditions and crop diseases.
London, Elena Volodina
© 2025, RIA "Novy Day"
Now, let's delve into the key factors that have contributed to this unprecedented jump in the cost of cocoa beans.
Key Factors Behind the Cocoa Price Surge
1. Climate Catastrophes and Environmental Disruptions
Harsh weather events, such as storms, delayed rains, and heatwaves in West African countries, which collectively produce approximately 70% of the world's cocoa, have wreaked havoc on our beloved cocoa crops and drastically reduced this season's yields. For example, Ivory Coast, which is the world's leading cocoa producer, experienced a disheartening 9% year-on-year drop in its mid-crop harvest due to these horrid environmental disruptions. This has led to a significant reduction in supply, fueling price increases.
2. Supply Shocks and Crop Diseases
The supply chain is suffering from tightened supplies due to reduced harvest sizes and the impact of diseases affecting cocoa plants. Despite some impressive resilience in processing volumes, the overall supply remains highly strained, with some forecasts projecting declines in global grindings (processing) due to high prices and mounting uncertainty in international trade.
In addition, the temptation of more lucrative crops, such as palm oil, is enticing cocoa farmers to transition away from cocoa production, further exacerbating this supply crunch.
3. Strong Market Demand and Resilient Processing
Counterintuitively, despite the fact that many experts had expected demand to slump at such exorbitant prices, cocoa processing volumes in Europe and Asia have only seen moderate reductions of around 3.7% and 3.4%, respectively, versus projections of around a 5% decline. This remarkable resilience in demand from key consuming regions has bolstered prices.
The growing appetite for cocoa in Asian markets is an additional factor contributing to escalating prices.
4. Financial Speculation and Market Manipulation
Cocoa prices have been subject to extraordinary volatility and speculative positioning by traders, with futures prices more than quadrupling in recent years. This unchecked financial speculation serves to amplify price fluctuations and drive record-breaking rallies.
Policies, changes, and market psychology, driven by the combined forces of supply constraints and demand expectations, generate further price misalignments.
5. Industry Dominance and Unfair Pricing Dynamics
The cocoa industry is largely controlled by major multinational companies that wield a significant influence over global chocolate manufacturing. This dominance contributes to distorted pricing dynamics and narrow profit margins throughout the supply chain.
Historically, cocoa farmers have been paid meager prices for their produce. But now that prices have surged, the question of fair compensation for these hard-working individuals remains hotly debated.
In conclusion, the incredible escalation of cocoa bean prices beyond $11,000 per ton is primarily fueled by severe climate-related supply shortages in West Africa, persistent crop deficits, resilient demand in key markets, and rampant speculative trading in futures markets. These factors work together to exert upward pressure on prices, making cocoa inaccessibly expensive for consumers and raising concerns about affordability and future market sustainability.
The surge in cocoa prices is not only a financial issue for the industry, but also a concern for consumers, as the price of cocoa beans has reached an astronomical $11,058 per ton. This price hike can be attributed to numerous factors such as climate catastrophes and environmental disruptions in West African countries, reducing this season's yields; supply shocks and crop diseases affecting cocoa plants; strong market demand and resilient processing in Europe and Asia; financial speculation and market manipulation by traders; and the industry's dominance by major multinational companies that contribute to distorted pricing dynamics.
