In recent weeks, record cocoa prices have made headlines worldwide as a warning sign of how expensive chocolate would become around Easter time. The truth, however, is that the worst is yet to come.
A survey by Itaú BBA’s agribusiness division shows that the recent price spike started in May last year, when cocoa contracts were traded between USD 2,000 and USD 3,000 per ton on New York’s commodity exchange.
“In September, this price surpassed USD 4,000, and from the beginning of this year until earlier this week, we saw it soaring to over USD 10,000, a level never seen before,” describes Agro Itaú BBA analyst Francisco Carlos Queiroz.
Native to South America, the largest producers and exporters of cocoa are currently in West Africa: Ivory Coast and Ghana. Prices started to rise amid a scenario of bad weather, diseases, and aging, less productive crops in these two countries, which account for nearly two-thirds of the global supply.
“But lately, there is also the speculative effect of funds negotiating these contracts in New York, wanting ‘their share’ of the rally,” points out Mr. Queiroz.
Once one of the biggest global producers of cocoa products in the 1980s, Brazil found itself impacted by prices internally, as trading on the New York exchange is also the basis for the country’s domestic market.
While cocoa prices in New York went up by 63 percent in 2023 and 137 percent in 2024, prices in the Brazilian city of Ilhéus, in Bahia — which sets the basis for the whole country — rose by 57 percent last year (from BRL 209 per 15 kilos to BRL 328) and by 130.32 percent this year (to BRL 753).
“Our industry pays the premium, the same price negotiated abroad or more for Brazilian cocoa to stay [in the country] as we are the fifth-largest chocolate consumer market, but we do not produce enough to supply our installed processing capacity of 275,000 tons,” says the president of...
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