In 2024, Ghana produced approximately 650,000 metric tons of cocoa beans, while Côte d'Ivoire produced around 1.8 million metric tons. The global demand for cocoa beans in 2024 was projected to be 4.779 million metric tons. Based on these production figures, there was a significant yield deficit of approximately 2.429 million metric tons.
These statistics highlight the cocoa beans market's ongoing challenges, including supply constraints, price volatility, and consistent consumer demand.
As we enter the new year, we will continue to analyze the cocoa forecast in relation to global market trends and projections.
2024 Cocoa Outlook
The global cocoa beans market experienced several notable trends from January 2024 to December 2024. Key producing countries like Côte d’Ivoire and Ghana faced production declines due to factors such as diseases (e.g., swollen shoot virus), illegal mining, and adverse weather conditions. Weather patterns, including El Niño and La Niña, negatively affected cocoa production, leading to reduced yields.
Cocoa prices saw significant fluctuations, with prices nearly tripling over the year. By December 2024, cocoa futures were trading at around $11,441 per ton in London and $11,545 per ton in New York. The surges in prices were driven by production shortfalls and market deficits, leading to higher costs for chocolate manufacturers and consumers.
IIn Ghana, the price of cocoa butter experienced a 300% increase, with the cost of a ton rising from $7,000 in the first half of the year to over $20,000 per ton by October 2024.
Despite high prices, consumer demand for cocoa-based products remained relatively stable, driven by the popularity of chocolate and premium confectionery products. Towards the end of the year, there were signs that demand might be starting to decline, potentially leading to market equilibrium if production does not improve.
Unwrapping the Cocoa Forecast for 2025
Given the current market conditions and projections, and while there might be some fluctuations, the overall trend suggests that cocoa bean prices will remain high throughout 2025. Several factors contribute to this forecast:
Supply Constraints: Major cocoa-producing countries, including Ghana and Côte d'Ivoire, are grappling with a multitude of challenges that have significantly affected their cocoa output. These challenges include adverse weather conditions, such as prolonged droughts and excessive rainfall, which can lead to poor crop yields and increased vulnerability to pests and diseases. Additionally, the prevalence of crop diseases, like black pod disease and swollen shoot virus, has further exacerbated the situation, decimating cocoa plants and reducing the overall production capacity. Furthermore, the persisting illegal mining activities in these regions have led to deforestation and soil degradation, detrimentally impacting the land's fertility and the sustainability of cocoa farming. As a result, the available supply of cocoa has diminished, creating a ripple effect throughout the global chocolate industry, where sourcing high-quality cocoa is becoming increasingly difficult.
Regulatory Changes: The European Union Deforestation Regulation (EUDR), set to take effect in early 2025, introduces a new layer of complexity to the cocoa supply chain. This regulation aims to combat deforestation linked to agricultural products by imposing stricter requirements on the importation of cocoa and other commodities. Under the EUDR, importers will be required to provide detailed documentation proving that their cocoa has not contributed to deforestation in the producing countries. This means that cocoa producers will need to adopt more sustainable farming practices and enhance traceability throughout their supply chains. As a consequence, these regulatory changes are likely to further limit the supply of cocoa available in the market, as producers may struggle to meet the new compliance standards, leading to potential disruptions in the flow of cocoa to European markets.
Global Demand: Despite the challenges faced in cocoa production, the global demand for chocolate continues to show robust growth. Consumers around the world are increasingly seeking high-quality chocolate products, driven by a desire for indulgence, premium experiences, and unique flavors. This persistent demand, combined with the constrained supply due to the aforementioned factors, is expected to keep cocoa prices elevated. As producers and manufacturers navigate these market dynamics, they may pass on the increased costs to consumers, resulting in higher prices for chocolate products. The imbalance between supply and demand is likely to create a volatile market environment, where prices fluctuate based on the availability of cocoa and the ongoing trends in consumer preferences.
There is a substantial price disparity of approximately 45% between cocoa products processed in Ivory Coast and those processed in Ghana, despite the lower cost of cocoa beans in Ghana compared to neighboring countries. This price difference can be attributed, in part, to the limited access Ghanaian cocoa processing companies have to cocoa beans. Additionally, the smuggling of cocoa beans from Ghana remains a significant challenge for the cocoa industry. However, it appears to be the only means for cocoa farmers to secure some profit by selling their produce to neighboring countries.
Unless strategic legislation is enacted to support the welfare of Ghana's cocoa farmers, smuggling activities will persist, leading to economic losses.
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