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COCOA MARKET REPORT – Q1 2025

Cocoa Prices Take a Dip After Record Highs

In February 2025, cocoa prices followed the classic market cycle: “what goes up must come down.” After reaching record highs, prices trended downward (Figure 1). This report examines cocoa market movements five months into the current cocoa season. 1

The Impact of Record Cocoa Prices on Supply & Demand

High cocoa prices in recent years have encouraged greater investment in cocoa farming, leading to higher production in key growing regions. Côte d’Ivoire, the world’s top cocoa producer, saw a 14.8% increase in cocoa arrivals at its ports, reaching 1.4 million tonnes by March 9, 2025, compared to the same period last year (LSEG data). In Ghana, graded and sealed cocoa stocks hit 550,000 tonnes by the end of January 2025, already exceeding the
country’s total production of 530,000 tonnes in the 2023/24 season. Other major cocoaproducing countries have also reported higher output.

However, while supply is increasing, demand is under pressure due to high cocoa costs. Leading chocolate manufacturers, including Mondēlez and Hershey, have reported major cost challenges:

  • Mondēlez described the cocoa price surge as “unprecedented cost inflation” 1
  • Hershey warned that cocoa price hikes will “put significant pressure on 2025 earnings” 2

 

Source: 1 https://www.icco.org/

Source: 2 https://www.thehersheycompany.com/en_us/home/newsroom/press-release/2025-02-06-Hershey-Reports-Fourth-Quarter-and-Full-Year-2024- Financial-Results-Provides-2025-Outlook.html

 

Cocoa Price Movements in February 2025

Compared to February 2024 (Figure 2), cocoa prices moved in the opposite direction. Last year, tight supply pushed prices up, but in February 2025, a stronger supply outlook helped shift the market into a contango structure, meaning futures prices were higher than current prices.

  • First Week of February: Prices started at $10,747 per tonne in London and $10,952 in New York, but declined 9% by the end of the week, reaching $9,814 in London and $9,984 in New York. The drop was linked to favourable weather conditions in West Africa, improving crop prospects.
  • Second Week: Prices remained stable, fluctuating between $9,662–$10,240 in London and $9,690–$10,397 in New York.
  • Third Week: Prices fell further to $9,248 in London and $8,951 in New York, driven by weaker demand and continued reports of good crop conditions.
  • Final Week: Prices rebounded slightly as cocoa export activity in Côte d’Ivoire slowed down, providing some support for the market. However, this did not indicate a drop in supply, only a slower pace of shipments.

 

What’s Next?

With production increasing and prices adjusting, the cocoa market is entering a period of transition. While better supply should help stabilize costs, weaker demand and economic uncertainty could influence how the market evolves in the coming months.