Global cocoa prices likely to decline gradually on forecast of surplus 

Expecting a rebound in cocoa production globally after the 2024-25 season, the report said the spike in prices will stimulate expansion through increased farm care and new plantings
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SODIQ ADELAKUN

Global cocoa prices are expected to witness a gradual decrease in the short to medium term due to forecasts of a global surplus.

Oran van Dort, Commodity Analyst for RaboResearch, said in the Rabobank’s research report: “While expectations for a significant recovery in global cocoa production in the 2024-25 season have been tempered, prices are anticipated to gradually decrease in the short to medium term due to a forecast global surplus. However, prices will remain higher than pre-2023 levels.”

The report said that high prices will incentivise an increase in global production through new plantings and increased farm care, particularly outside Côte d’Ivoire and Ghana, shifting production away to other regions. This diversification could bring more stability to the market in the future but also poses a risk of oversupply, potentially leading to a price collapse by the 2027-28 season.

Output rebound

Expecting a rebound in production globally after the 2024-25 season, the report said the spike in prices will stimulate expansion through increased farm care and new plantings. Furthermore, there will be a structural shift in production away from Côte d’Ivoire and Ghana, as prices in 2024 incentivised planting new trees in origins that do not have fixed farmgate price models. The higher farmgate prices provided to farmers in Côte d’Ivoire and Ghana may prove insufficient to reverse the effects of prolonged underinvestment, it said.

Highlighting the consequences of a diversification in production, the report said the cocoa market will be less sensitive to production shocks caused by either adverse weather or disease in Côte d’Ivoire and Ghana.

Secondly, if the rate of plantings overshoots the decline in West African production, the cocoa market will be at risk of price collapse in the future due to oversupply.

Mentioning that seedlings will take three to four years to produce a meaningful crop, van Dort said: “We could see this excess supply creep in as soon as the 2027-28 season. While this is hard to quantify currently, a production rebound in Côte d’Ivoire and Ghana on top of this – particularly if Ghana’s Cocobod were to acquire 200,000 hectares for large-scale cocoa plantations, as reported in the news – could be devastating to prices.”

Production estimates

According to the RaboResearch, overall global cocoa production is forecast to reach 4.76 mt in 2024-25.

Based on current arrival figures and expectations for the mid-crop, it estimated total production in Côte d’Ivoire to reach 1.78 million tonnes (mt), up 106,000 tonnes from 2023-24 but at least 200,000 tonnes lower than October estimates. It estimated production in Ghana at 590,000 tonnes, up from 530,000 tonnes last season.

Expressing optimism over production outlook for Ecuador, the report said it could reach 500,000 tonnes. RaboResearch continues to expect production in Ecuador to overtake Ghana in the future, now at an accelerated rate following the price spike, as the former does not utilize a fixed farmgate price model.

Production estimation from other destinations included Nigeria (335,000 tonnes), Cameroon (305,000 tonnes), Brazil (220,000 tonnes), Peru (160,000 tonnes), and Indonesia (230,000 tonnes).

Domestic scenario

A Kishore Kumar Kodgi, President of the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd, told businessline that the crop is good this year. Campco is getting supplies from Karnataka, Kerala and Andhra Pradesh.

On the crop area expansion, he said his cooperative alone has distributed around 70,000 saplings to its farmer-members. Expecting a good survival rate of these saplings, he said there could be surplus crop in the next four-five years.

In tune with the global prices, the price of the commodity has come down in India also. The cooperative buys dry cocoa at around ₹450 a kg now. It paid a maximum of ₹800 a kg for dry cocoa in 2024 season.

Bumpy ride

RaboResearch report highlighted some key factors that will likely keep volatility elevated in cocoa market.

It said low global stocks and record-low combined open interest will continue to exacerbate prices, with no immediate remedies for either situation. Additionally, production will remain at the mercy of the weather, with cocoa particularly exposed to the recently erratic West African climate.

Most agricultural commodities, including cocoa, are also exposed to the dynamic and ever-changing US tariff situation. The opaqueness of the cocoa market, coupled with the extent of illegal exports out of Côte d’Ivoire and Ghana – an issue that will persist as long as terminal prices are far higher than farmgate prices – will continue to distort data, increase inaccuracies in forecasting, and heighten market uncertainty, it said.

The cocoa market is set to remain a roller coaster, the report added.

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Published on May 23, 2025