Cocoa market Insights from 2022 to 2026 and Beyond

The global cocoa market has experienced a period of unprecedented volatility from 2022 to the present, moving from a stable commodity to a headline-grabbing price surge, followed by a necessary correction. For all stakeholders in the African cocoa supply chain, from farmers to processors and financiers, understanding this dynamic timeline is essential for future planning.

Phase 1: Stability and Supply Pressure (2022 – Early 2023) 

In 2022 and the early part of 2023, cocoa futures generally traded within a stable, historical range, often between $2,400 and $3,500 per metric tonne. Demand remained steady, but underlying supply issues were beginning to accumulate:

• Aging Trees & Disease: Long-term structural problems, like aging cocoa trees and the slow spread of diseases (such as Cacao Swollen Shoot Virus), began to quietly affect yields in West Africa (Côte d'Ivoire and Ghana).

• Fertilizer Costs: The global surge in fertilizer prices increased the cost of production for farmers, particularly in Nigeria and Cameroon, pressuring margins.

Phase 2: The Historic Price Surge (Late 2023 – Early 2025) 

The market exploded into a state of panic-buying and record highs from late 2023 through early 2025, driven by a perfect storm of factors that dramatically reduced global supply:

• Climate Catastrophe: The intense El Niño weather pattern brought prolonged drought and heatwaves to West Africa, severely damaging the main crop and flowering cycles.

• Record Deficit: Production shortfalls led to the largest global cocoa deficit in over 60 years in the 2023/2024 season, driving prices to an all-time high, exceeding $12,000 per metric tonne at their peak in late 2024/early 2025.

• Speculative Activity: Supply fears were amplified by investor speculation in the futures market, creating massive price swings that made risk management extremely challenging.

Phase 3: The Correction and Stabilization (Late 2025 – 2026 Forecast) 

As the 2025/2026 crop season began, the market began a significant correction as prices retreated below the $7,000 mark and stabilized around the $5,000 to $6,500/tonne range. This shift was fueled by:

• Demand Destruction: Historically high prices finally curbed consumer appetite, leading to major global chocolate producers reporting a mid-single-digit drop in cocoa product sales and lower quarterly grindings data.

• Improved Supply Outlook: Favorable weather returned to parts of West Africa, leading to early optimism about the main crop. The International Cocoa Organization (ICCO) subsequently forecasted a global surplus for the 2025/2026 season—the first in four years.

• Farmgate Price Hikes: Governments in Ghana and Côte d'Ivoire raised farmgate prices, incentivizing farmers and potentially boosting bean deliveries.

Beyond 2026: The Long-Term Structural Risks 

While the immediate crisis has eased, the core long-term challenges for the cocoa market remain and will define its future structure:

• Climate Change: Unpredictable weather is the single greatest threat. The volatility of 2024 showed that cocoa production is highly vulnerable to extreme climate events.

• Sustainability Compliance (EUDR): New EU Deforestation Regulation (EUDR) requires full traceability and proof of deforestation-free sourcing. This creates a significant cost and compliance burden for African SMEs and farmers, but also an opportunity for those with robust traceability systems.

• Sustainable Yields: The need for substantial investment in farm rejuvenation and sustainable, disease-resistant planting remains critical to ensure reliable supply for the next decade.

TBT Agro's Strategic Outlook for Partners

The volatility of the 2020s has permanently reset the floor for cocoa prices and risk. For TBT Agro, this necessitates a focus on:

• Traceability and Ethical Sourcing: We continue to invest in systems that guarantee full supply chain transparency to meet global ethical standards.

• Risk Mitigation: Utilizing strategic trade financing and hedging tools to protect our partners from sudden market swings.

• Farmer Resilience: Supporting farmers with the resources and financing needed to transition to climate-smart agriculture and improved yields.

Partner with TBT Agro to navigate these volatile waters. Let us help you transform market risk into reliable growth.