Cocoa price tumbles to 20-month low as record rally ends
Cocoa prices have tumbled to a 20-month low, bringing to an end a dramatic two-year rally that had driven the market to record highs and squeezed chocolate manufacturers worldwide.
According to the International Cocoa Organisation, prices are currently about $6,035 (N8.88 million) per ton— down from a December peak of above $12,000. This reflects a 50 percent fall.
Meanwhile, London prices, which had almost tripled in the earlier months of last year, are now down about 58 percent from their April 2024 peak at $4,262.
Analysts say the retreat reflects a drop-off in consumer demand as a result of the higher prices, as well as expectations of a better crop given improved weather and higher state-guaranteed prices in West Africa. In addition, speculators who had previously been riding the rally have more recently dumped their positions, with many now betting on falling prices.
The fall in price marks a sharp reversal after a supply shock in 2022 in Ivory Coast and Ghana, which together produce about 60 percent of the world’s cocoa. Dry weather, disease and years of under-investment by farmers who were unable to afford fertiliser or replace ageing trees sent futures prices soaring.
Read also: Processed cocoa products more profitable to Nigeria’s economy than raw exports – Alamu
Those supply fears have now started to ease. Rains have returned after last year’s unusually early dry season, reducing the risk of another failed crop. Forecasters expect the 2025-26 harvest, which began on October 1, to produce a surplus of supply over global demand.
Governments in West Africa have sharply raised the prices they pay farmers, a move expected to boost supply. Ahead of an election, Ivory Coast lifted its guaranteed rate by more than 25 percent to about $5,000 per ton in dollar terms, prompting Ghana to raise its own to 58,000 cedis (about $4,600).
Better guaranteed incomes are seen as likely to encourage growers to sell through official channels rather than to smugglers, to prune trees, buy fertiliser and plant new cocoa — moves likely to increase production over time.
Despite the sharp fall, few in the market expect a return to the pre-2023 era, when cocoa traded between $2,000 and $3,000 in the international market. But supply remains constrained by ageing trees, crop disease and climate risk.
Last year, unfavourable weather conditions in Côte d’Ivoire led to a demand boom that spurred global cocoa prices to rise to an all-time high of N12 million per ton in Nigeria.
