Cocoa prices have skyrocketed in 2024, driven by severe supply shortages and market volatility. Global cocoa stocks monitored by ICE are at their lowest in 21 years, while New York ICE cocoa futures surged by 58% since January. The International Cocoa Organization (ICCO) reported a global deficit of 374,000 tonnes for the 2023-24 season, marking a sharp increase. Industry leaders like Hugo van der Goes of Barry Callebaut describe the situation as a “justified panic,” emphasizing the unprecedented challenges facing the cocoa market.
Understanding the Cocoa Supply Crisis
The cocoa market is experiencing one of its most turbulent periods in decades. Global cocoa stocks have plummeted to levels not seen since 2003, reflecting a severe shortage of supply. Nearby New York ICE cocoa bean futures jumped by 58% in 2024 alone, and prices are now 143% higher than they were a year ago. This dramatic rise is fueled by a global cocoa deficit of 374,000 tonnes for the 2023-24 season, according to the ICCO.
Hugo van der Goes, Vice President of Cocoa at Barry Callebaut, summed up the industry’s sentiment: “The industry is in justified panic mode.” The supply constraints are unlike anything seen before, and chocolate companies are scrambling to adapt. The shortage isn’t just a temporary blip—it’s a sign of deeper issues in cocoa production and distribution.
How This Impacts the Chocolate Industry
Rising cocoa prices are forcing major players in the chocolate industry to make tough decisions. Companies like Mondelēz and Hershey are facing unprecedented cocoa cost inflation, leading to higher prices for consumers. In the UK, chocolate prices rose by 12.4% by November 2024, reflecting the strain on the supply chain.
Global cocoa production fell by 14% in the 2023-24 season, exacerbating the problem. To cope, some manufacturers are reformulating their products, using less cocoa or turning to alternatives. This shift isn’t just about cost—it’s about survival. As demand softens due to higher prices, the industry is bracing for a long-term challenge. For a deeper dive into how chocolate has evolved as a dessert, check out the history of chocolate.
Regulatory and Environmental Challenges
Adding to the supply crisis are new regulatory and environmental hurdles. The EU Deforestation Regulation (EUDR) requires third-party shippers to comply with strict standards by December 30, 2025. This regulation complicates the cocoa supply chain, as about 50% of cocoa comes from cooperatives and aggregators, while the other half relies on third-party shippers.
Approximately 25% of Europe’s cocoa supply will need to come from compliant third-party shippers, adding another layer of complexity. Climate change and diseases are also reducing cocoa yields, making it harder for producers to meet demand. For more on how climate change affects cocoa, visit this detailed analysis.
What’s Next for Cocoa Prices?
While there’s hope for a better crop in the 2024/25 season, cocoa prices are expected to remain high. World cocoa production is projected to increase by over 11% year-over-year, reaching around 4.8 million tonnes. However, the global balance will still see a modest deficit of about 100,000 tonnes, keeping pressure on prices.
Latin America shows potential for increased production, but it’ll take time to alleviate current shortages. Tracey Allen, Agricultural Commodities Strategist at J.P. Morgan, noted, “Cocoa prices will likely remain structurally higher due to supply constraints.” For those curious about how exotic ingredients are shaping desserts, explore these emerging trends.
Navigating the Future of Cocoa
The cocoa market faces a perfect storm of challenges—supply shortages, regulatory changes, and environmental pressures. While prices are expected to stabilize somewhat, they’ll remain high compared to historical levels. Chocolate lovers may need to brace for higher costs and changes in their favorite treats.
For those with dietary concerns, understanding how desserts like churros can impact health is essential. Meanwhile, the story of Mexican vanilla highlights the rich traditions behind many beloved flavors. As the cocoa industry adapts, it’s clear that the road ahead is both challenging and full of opportunity.