After a year of record volatility, the global cocoa market is showing signs of easing. Prices, which soared above $12,000 per ton at the end of 2024, have since fallen below $8,000.
According to J.P. Morgan Global Research, conditions are improving as weather stabilizes and new plantations in Ecuador reach maturity, boosting supply. At the same time, industrial demand has weakened, with chocolate manufacturers struggling under higher costs and thinner profit margins.
Prices Stabilizing at Elevated Levels
Despite the recent downturn, J.P. Morgan expects cocoa prices to remain structurally higher for an extended period, around $6,000 per ton. This could force the chocolate industry to raise retail prices, potentially weighing on sales volumes.
“The impact of last year’s price surge has already been felt, and the long-awaited cocoa grinding data confirmed the demand destruction widely reported by the industry,” said Tracey Allen, agricultural commodities strategist at J.P. Morgan.
She noted that the sector is operating in an environment of historically high operating costs and reduced cocoa availability, with retailers often limiting manufacturers’ ability to pass on expenses.
Production Outlook for 2025/26
Cocoa grinding is likely to remain seasonally low through the second half of 2025 due to depleted inventories. A significant rebound in demand appears unlikely until global supply and stock levels improve.
Allen added that production is expected to rise during the 2025/26 season, supported by better weather and rainfall in West Africa, the world’s main growing region. Ecuador is also projected to expand output further.
“Although preliminary and highly dependent on weather, supply is set to improve consistently in 2025/26, with a recovery across West Africa and continued expansion in Ecuador,” Allen said.
Chocolate Industry Under Pressure
Chocolate prices have already climbed as manufacturers passed on cocoa costs to consumers. This has reduced sales volumes, while private-label products gained share among price-sensitive shoppers. At the same time, premium chocolate brands continue to expand.
“The global chocolate market has seen lower volumes due to higher prices,” said Céline Panouzi, head of European Staples & Beverages at J.P. Morgan. “Some of the decline may be temporary, but it also reflects greater price elasticity in the chocolate market, which could intensify if prices rise further in the second half of the year.”
If cocoa prices remain structurally high, chocolate products could become even more expensive. “With the chocolate industry expected to raise prices by about 10% this year, volumes will likely stay under pressure,” added Edward Hawkin, member of J.P. Morgan’s European Staples team.
