Cocoa crisis (2020s)

Did You Know?

• Anthropologist Carla Martin described issues around cocoa production as a wicked problem in 2024.
• Changes in cocoa price did not significantly impact cocoa growers' income due to supply chain complexities.
• The impacts on prices in Europe were more pronounced than in America due to greater reliance on West African cocoa.

Background

Most of the world's cocoa is produced in Ghana and Ivory Coast, which together accounted for over 60% of global production as of 2024. Cocoa beans are sold in advance of the growing season via government contracts to trading houses such as Cargill, Olam and Barry Callebaut, then traded on futures exchanges. Prices had remained relatively steady around $2,500 per tonne since the 1980s.

Causes

The price rise is attributed primarily to weather and disease, including unpredictable rainfall and high temperatures from climate change, black pod disease, and cacao swollen shoot virus (CSSV). In Ghana's North West, 81% of the crop was impacted by CSSV in 2024. Farmers have shifted to more profitable crops, leaving older, unproductive trees. In Ghana, cocoa smuggling and illegal gold mining using chemicals like arsenic, lead, and mercury have also affected prices.

Price rally

After a poor 2023 harvest, prices rose to $4,200 per tonne by December 2023. Speculation drove prices from $6,000 in February 2024 to $9,000 in March, reaching almost $11,000 by mid-April. Volatility increased as hedge funds exited to avoid risk, reducing liquidity. On the London futures index, prices hit $11,530 per tonne on 13 June 2024, compared to a $3,182 average the prior year. Prices fell slightly in late 2024 but rose again in December, remaining elevated into February 2025. J.P. Morgan Global Research predicted in August 2025 that prices would stay structurally high. By October 2025, London prices had fallen to $4,106 per tonne.

Response and effects

In early 2024, Ghana delayed delivery of 350,000 tonnes of cocoa beans, further increasing prices. In July 2024, COCOBOD and Mars Wrigley announced development of technology to identify early CSSV infection. Chocolate businesses shuttered worldwide. A 2024 survey by the National Confectioners Association found 45% of respondents had cut chocolate spending by switching brand or size. In Nigeria, farmers replaced old trees with new saplings and expanded cocoa farmland.