Cocoa prices spike 24% over fears of short supply for Christmas chocolatiers

The sharp rise is likely driven by supply constraints in Ghana and Ivory Coast and surging festive demand for chocolate.

In Ghana, the world’s second-largest cocoa producer, strong winds and low rainfall in March disrupted the harvest, pushing prices up by 60% earlier in the year.

While conditions stabilized between March and October, heavy rains in Ivory Coast’s southwestern regions in late September disrupted cocoa bean drying and delayed transport to ports, adding further to supply problems.

With supply issues lingering into December, cocoa prices have climbed to $11,300, a sharp increase from $9,417 at the start of the month.

The persistent supply imbalance, fueled by climate-related disruptions and strong seasonal demand, has likely driven prices to fresh highs.

The year began with a notable surge in cocoa prices, with gains accelerating significantly between January and March, surpassing levels recorded during the same period in 2023.

Growing fears over supply shortages during the festive season, fueled by heightened demand from chocolatiers, are likely to continue to drive the futures higher.

Cocoa arrivals from the world’s largest producers have fallen 15% below levels recorded during the same period in 2022, signaling a difficult season despite earlier optimism. A European exporter told Reuters, “If you compare arrivals to 2022, a normal season, we are 15% below that. That means the situation isn’t rosy, despite appearances.” 

Farmers in western and southwestern Ivory Coast regions that produce more than half of the country’s cocoa, have voiced frustration as heavy rains damaged crops and dashed harvest expectations.

“We were happy at the start of October, but the rains arrived and ruined everything. Today we only have a few pods to harvest and nothing more,” said Daniel Konan Kanga, a cocoa farmer in the western city of Duekoue, who owns six hectares of farmland.

According to commodity trader Pierre Andurand of Andurand Capital Management, who is already bullish on cocoa in the financial markets, ‘’structural deficit following consecutive bad harvests and dwindling stockpiles in consuming countries has caused the spike in the price of futures instruments.’’