Episode Overview:

Chocolate lovers everywhere have been feeling the pinch — and today we unpack why. Cocoa prices have skyrocketed, production is at its lowest in over a decade, and the traditional cocoa supply chain is under immense strain. In this episode, we explore:

• Why cocoa prices hit a historic high of over $12,900 per ton
• The devastating production drop in West Africa, particularly in Côte d’Ivoire and Ghana
• Major threats: aging trees, swollen shoot virus, and climate change
• Why many cocoa farmers aren't benefiting from high prices
• Brazil’s ambitious rise — from collapse to potential world leader in cocoa
• The risks and rewards of Brazil’s new cocoa mega farms
• Latin America’s growing role and Ecuador’s success story
• How climate resilience and farmer-centric approaches are reshaping cocoa’s future
• Three potential scenarios for the cocoa market through 2030

Key Topics:

• The Cocoa Price Surge: Causes behind the record price increases and their global impact.
• West Africa’s Crisis: Aging farms, disease, and climate threats leading to a major production collapse.
• Brazil’s Comeback: How Brazil is planning to double cocoa output through mega farms and agroforestry.
• Risks of Monoculture: Why genetic diversity matters in large-scale farming.
• Farmer-Centric Innovations: New programs in Colombia and Ghana designed to stabilize incomes and promote sustainability.
• Climate Resilience Efforts: Breeding tougher trees, improving soils, and rethinking farming practices.
• The Big Picture: Managed recovery, structural deficit, or overshoot and bust — where is cocoa headed?

Takeaways:

• The cocoa market is at a crossroads — with massive uncertainty about its future.
• Sustainability, resilience, and empowering farmers will be critical to stabilizing supply.
• Latin America, especially Brazil, may redefine the global cocoa landscape.
• Investment, innovation, and global cooperation are urgently needed to secure chocolate’s future.

Global Cocoa Market Update – Week of April 27, 2025

This week's episode delivers an in-depth look at shifting cocoa production dynamics, emerging economic challenges, and evolving global demand trends impacting the cocoa industry.

Key Themes Discussed:

Ivory Coast Export Slowdown and Mid Crop Concerns
Cocoa shipments from Ivory Coast increased 11.3% year-over-year to 1,480,000 metric tons — a stark deceleration compared to the 35% surge seen last December. The upcoming mid crop is forecast at 400,000 metric tons, a 9% decline year-over-year, driven by dry weather. Political instability, marked by the exclusion of opposition leader Tidjane Thiam from elections, adds to market risks.

Ghana's Cocoa Production Challenges Deepen
Ghana, the world’s second-largest cocoa producer, has revised its production forecast downward for the second time this season to 670,500 metric tons. The persistent spread of swollen shoot disease, affecting over 40% of productive capacity, underscores the sector’s structural challenges, with replanting efforts hampered by critical funding shortages.

Brazil’s Ambitious Production Expansion
In contrast, Brazil is pursuing aggressive growth. Through Schmidt Agricola’s large-scale, high-density cocoa plantations, Brazil aims to boost production dramatically, with projections of reaching 1.6 million metric tons over the next decade. While promising, risks around genetic uniformity and disease susceptibility remain.

Global Market Overview: Demand Holds, Pressures Mount
Grindings in major regions such as North America, Europe, and Asia saw less-than-expected declines, suggesting steady demand resilience despite elevated cocoa prices. The International Cocoa Organization projects a global surplus, offering slight relief, but market dynamics remain heavily influenced by regional production risks, supply chain disruptions, and geopolitical uncertainties.

Sustainability and Innovation Trends
Efforts like Luker Chocolates’ sustainable initiatives in Colombia highlight how technology-driven, eco-friendly practices may become key to stabilizing global cocoa production and reducing long-term price volatility.

Strategic Implications:

• Supply Volatility:
  Structural production challenges in West Africa, particularly disease outbreaks and political risks, will continue to shape global supply concerns.
• Emerging Producers:
  Brazil’s scale-up could alter traditional market dynamics, creating more competition for West African cocoa exporters over the next decade.
• Demand Shifts:
  Despite price pressure, resilient grindings suggest strong underlying consumer demand, particularly for premium and sustainably sourced chocolate products.
• Sustainability as a Growth Lever:
  Producers investing in sustainable agriculture and technological innovation may gain competitive advantages in an increasingly ESG-focused market environment.

Venezuela’s cocoa story is one of quality, and quiet resilience. Once celebrated as the world’s largest cocoa producer in the early 1800s, the country’s production today stands at a modest 15,000–20,000 tonnes per year — a mere 0.04% of the global supply.

While volume has plateaued over recent decades, the reputation of Venezuelan cocoa remains unmatched. The cocoa is prized by luxury chocolatiers and specialty markets around the globe — commanding prices double the global averages.

60% of the worlds best cocoa varieties come from Venezuela including Porcelana Criollo, Chuao, and Guasare.

The Caribbean, once the world's cocoa powerhouse, supplied as much as 70% of global production before West Africa took over in the 20th century. Today, the region contributes less than 5% but has reinvented itself as a hub for fine-flavor cocoa, prized by artisan chocolatiers.

Key Themes Discussed:

A Turbulent Production History
Saint Lucia’s cocoa industry has seen dramatic swings—from prominence in the 1700s to sharp declines in recent decades. Production fell significantly from 110 tons in 2009 to just 17 tons in 2018, highlighting persistent volatility.

The Power of Fine Flavor Status
Despite production challenges, Saint Lucia boasts a rare achievement: 100% Fine or Flavour Cocoa classification by the International Cocoa Organization. Only nine countries globally hold this distinction, positioning Saint Lucia’s beans as a prized asset among artisan chocolatiers.

The Terroir and Trinitario Advantage
Unique volcanic soils, tropical climate, and the cultivation of Trinitario beans contribute to Saint Lucia’s exceptional flavor profiles—chocolates imbued with tropical fruit notes, floral undertones, and rich complexity, setting it apart from mass-market varieties.

Hotel Chocolat’s Transformative Investment
The UK chocolatier’s acquisition of the historic Rabot Estate in 2006 marked a turning point. Through its Engaged Ethics program, Hotel Chocolat pays premium prices to farmers, promotes sustainable practices, and deepens the global appreciation of Saint Lucian cocoa through experiences like their eco-resort and London restaurant.

Challenges to Sustainable Growth
Saint Lucia’s cocoa sector faces aging infrastructure, labor shortages, and the risk of younger generations abandoning farming. These issues threaten both production quality and industry longevity unless addressed through modernization and education initiatives.

The Global Niche Strategy
Instead of competing on volume with giants like the Dominican Republic, Saint Lucia focuses on carving a premium niche market in Europe and North America—catering to consumers and artisans who value origin, flavor complexity, and ethical sourcing.

Building a Sustainable Future
Empowering farmers through training programs, promoting environmental sustainability (like shade-grown cocoa and biodiversity conservation), and preserving genetic diversity are critical steps. Maintaining Saint Lucia’s fine-flavor legacy hinges on balancing growth with the protection of its unique agricultural and cultural heritage.

Strategic Implications:

• Premium Market Positioning: By emphasizing quality and terroir, Saint Lucia can command premium prices and build brand loyalty among discerning chocolate makers.
• Sustainability as a Competitive Advantage: Environmental stewardship and community empowerment are increasingly important to global consumers, enhancing Saint Lucia’s market appeal.
• Storytelling Matters: Elevating the narrative around heritage, ethics, and craftsmanship strengthens Saint Lucia’s position in the specialty cocoa sector.

Overview

• Examination of why cocoa futures in New York and London are diverging in price
• Analysis of underlying factors: quality differences, currency dynamics, market speculation, and oil-related production costs

Market Differentiation

• New York vs. London Cocoa:
  • New York:
    • Trades premium cocoa sourced from Ghana and Ivory Coast
    • Used for artisanal and luxury chocolate production
    • Futures priced in U.S. dollars
  • London:
    • Predominantly supplied by older, lower-quality beans from Cameroon and Nigeria
    • Suitable for cost-effective milk chocolate production
    • Futures priced in British pounds

Currency Influence

• U.S. dollar strengthened by approximately 14% against the British pound from 2023 to 2025
• Stronger dollar increases international attractiveness of New York’s premium beans
• London’s pound-denominated cocoa becomes less appealing as a result

Speculative Trading and Market Strategies

• Speculators and arbitrageurs contribute to the price divergence
• Arbitrage strategy:
  • Purchase lower-priced cocoa in London
  • Improve quality through re-fermentation
  • Sell in New York for a higher price
• Market speculation intensifies the spread between the two exchanges

Quality and Storage Factors

• High-Quality Deliveries:
  • 85% of cocoa deliveries in New York (2024-2025) meet premium standards
  • Buyers pay an extra premium (up to $800 per ton) for superior quality
• London’s Inventory Challenges:
  • Approximately 340,000 tons of cocoa stored that do not meet premium standards
  • Around 40% of stocks held over three years, facing issues like moisture damage and fat bloom
  • Resulting in a discount of $1,200–$1,500 per ton relative to New York futures

Regional Demand Dynamics

• North America:
  • 18% annual growth in premium chocolate consumption since 2021
  • Increased demand for dark chocolate and bean-to-bar products drives up premium cocoa prices
• Europe:
  • European chocolate makers prioritize cost efficiency due to higher energy costs and subdued consumer spending
  • Preference for milk chocolate produced with lower-grade cocoa

Oil Prices and Production Costs

• Rising oil prices affect production costs, including fertilizer and diesel expenses
• Impact on cocoa-producing countries:
  • Depreciation of national currencies
  • Reduced farmers’ purchasing power and lower cocoa yields

Key Event Highlight: September 2024 Squeeze

• A “squeeze” on New York cocoa futures forced hedge funds with large short positions to cover
• Surge in demand from Asian chocolate makers triggered a price rally of approximately $2,400 per ton

Summary & Implications for the Industry

• The widening price differential is a result of quality stratification, currency fluctuations, and energy-linked costs
• Producers may need to:
  • Adopt quality certification systems
  • Reform futures market practices
  • Invest in renewable energy to combat rising oil costs
• The evolving global demand for premium chocolate presents ongoing challenges and opportunities for both cocoa producers and manufacturers

These show notes capture the critical factors influencing the current cocoa market landscape and provide insight into how these dynamics reflect broader trends in agricultural commodities.

Venezuela’s cocoa story is one of quality, and quiet resilience. Once celebrated as the world’s largest cocoa producer in the early 1800s, the country’s production today stands at a modest 15,000–20,000 tonnes per year — a mere 0.04% of the global supply.

While volume has plateaued over recent decades, the reputation of Venezuelan cocoa remains unmatched. The cocoa is prized by luxury chocolatiers and specialty markets around the globe — commanding prices double the global averages.

60% of the worlds best cocoa varieties come from Venezuela including Porcelana Criollo, Chuao, and Guasare.

The Caribbean, once the world's cocoa powerhouse, supplied as much as 70% of global production before West Africa took over in the 20th century. Today, the region contributes less than 5% but has reinvented itself as a hub for fine-flavor cocoa, prized by artisan chocolatiers. The Dominican Republic leads in volume, while islands like Trinidad & Tobago, Grenada, and Jamaica focus on premium beans. St. Lucia, with Hotel Chocolat’s investment, showcases the shift toward local processing and chocolate tourism, marking a new era for Caribbean cocoa.

Overview

• Examination of why cocoa futures in New York and London are diverging in price
• Analysis of underlying factors: quality differences, currency dynamics, market speculation, and oil-related production costs

Market Differentiation

• New York vs. London Cocoa:
  • New York:
    • Trades premium cocoa sourced from Ghana and Ivory Coast
    • Used for artisanal and luxury chocolate production
    • Futures priced in U.S. dollars
  • London:
    • Predominantly supplied by older, lower-quality beans from Cameroon and Nigeria
    • Suitable for cost-effective milk chocolate production
    • Futures priced in British pounds

Currency Influence

• U.S. dollar strengthened by approximately 14% against the British pound from 2023 to 2025
• Stronger dollar increases international attractiveness of New York’s premium beans
• London’s pound-denominated cocoa becomes less appealing as a result

Speculative Trading and Market Strategies

• Speculators and arbitrageurs contribute to the price divergence
• Arbitrage strategy:
  • Purchase lower-priced cocoa in London
  • Improve quality through re-fermentation
  • Sell in New York for a higher price
• Market speculation intensifies the spread between the two exchanges

Quality and Storage Factors

• High-Quality Deliveries:
  • 85% of cocoa deliveries in New York (2024-2025) meet premium standards
  • Buyers pay an extra premium (up to $800 per ton) for superior quality
• London’s Inventory Challenges:
  • Approximately 340,000 tons of cocoa stored that do not meet premium standards
  • Around 40% of stocks held over three years, facing issues like moisture damage and fat bloom
  • Resulting in a discount of $1,200–$1,500 per ton relative to New York futures

Regional Demand Dynamics

• North America:
  • 18% annual growth in premium chocolate consumption since 2021
  • Increased demand for dark chocolate and bean-to-bar products drives up premium cocoa prices
• Europe:
  • European chocolate makers prioritize cost efficiency due to higher energy costs and subdued consumer spending
  • Preference for milk chocolate produced with lower-grade cocoa

Oil Prices and Production Costs

• Rising oil prices affect production costs, including fertilizer and diesel expenses
• Impact on cocoa-producing countries:
  • Depreciation of national currencies
  • Reduced farmers’ purchasing power and lower cocoa yields

Key Event Highlight: September 2024 Squeeze

• A “squeeze” on New York cocoa futures forced hedge funds with large short positions to cover
• Surge in demand from Asian chocolate makers triggered a price rally of approximately $2,400 per ton

Summary & Implications for the Industry

• The widening price differential is a result of quality stratification, currency fluctuations, and energy-linked costs
• Producers may need to:
  • Adopt quality certification systems
  • Reform futures market practices
  • Invest in renewable energy to combat rising oil costs
• The evolving global demand for premium chocolate presents ongoing challenges and opportunities for both cocoa producers and manufacturers

These show notes capture the critical factors influencing the current cocoa market landscape and pro