When Chocolate Dreams Melt: Cocoa’s Wild Ride from Record Highs to a Supply Hangover
Three months ago, cocoa futures touched the sky. Today, the market’s sugar rush is over—and the crash is as dramatic as the climb.
From Euphoria to Reality: The Anatomy of a Price Plunge
For a brief, heady moment in early 2025, cocoa was king. New York cocoa futures (CC, NYB) soared to an all-time high of $12,500 per tonne—an eye-watering 170% above 2023 levels. Farmers in Ghana and Ivory Coast, the world’s two cocoa giants, saw unprecedented cash flowing into their villages. Chocolate producers scrambled to secure beans at any cost. But as of August 16, 2025, the mood has soured: cocoa futures have slumped -18.9% over the past three months, with prices now orbiting the $8,600 mark, even dipping below $8,000 at times.
Surplus Strikes Back: When Too Much of a Good Thing Sours the Market
The first domino fell in February, when the International Cocoa Organization (ICCO) projected a global surplus of 142,000 tonnes for the 2024/25 season—a sharp reversal from the previous year’s deficit of nearly 500,000 tonnes. West African output rebounded: Ghana’s crop is up 13%, Ivory Coast’s up 11%. By June, ICE-monitored U.S. port inventories hit a 10-month high of 2.36 million tonnes. Traders who had been pricing in perpetual scarcity suddenly found themselves awash in beans. The correction was swift: futures fell 10% in a single week and have kept sliding, dragging cocoa off its pedestal.
The Tariff Tango: Politics, Protectionism, and Unintended Consequences
April brought a fresh plot twist. The U.S. imposed a 21% tariff on Ivorian cocoa and a 10% levy on Ghanaian derivatives, threatening to choke off two-thirds of global supply from its most lucrative export market. The tariffs, aimed at addressing labor and sustainability concerns, sent shockwaves through the supply chain. Farmers warned of price instability; exporters pleaded for exemptions. But the immediate effect was paradoxical: after an initial price spike, buyers retreated, awaiting clarity. Meanwhile, West African exporters looked to Europe and Asia, pushing even more beans onto global markets and adding to the surplus pressure.
Chocolate Makers on a Diet: Demand Takes a Breather
The world’s sweet tooth didn’t vanish, but it did get more selective. After record-high cocoa prices, chocolate manufacturers—including Barry Callebaut and Hershey—slashed purchase volumes and warned of recipe changes. Barry Callebaut cut its 2025 sales guidance by 9.5%. Nielsen reported a 4.5% decline in global chocolate sales in the first half of 2025. Even in North America, Q2 grindings fell 2.8% year-on-year—an improvement, but still a contraction. As chocolate bars shrank and prices grew, demand softened, removing yet another pillar from beneath cocoa’s lofty valuation.
Regulation on Ice: The EU’s Forest Law and the Waiting Game
If tariffs rattled nerves, European regulation left the market in suspense. The EU’s long-awaited deforestation regulation, which would restrict market access for cocoa linked to forest loss, was postponed by 12 months in June. Chocolate makers, who had braced for tighter supplies and higher compliance costs, got a reprieve. Instead of scrambling for certified beans, buyers sat on their hands—further sapping immediate demand and adding to the market’s corrective mood.
Cost Shock and Currency Currents: The Macro Layer
Behind the cocoa drama, global macroeconomic forces added their own volatility. Fertilizer and energy costs remain elevated, squeezing margins for both farmers and processors. The US dollar slid 10% against the West African franc since February, boosting local farmer revenues but raising the cost of imported inputs. Inflation lingers, and with the Federal Reserve’s next move uncertain, risk appetite across commodities has waned—sending speculative traders to safer ground.
Unwrapping the Lesson: A Market That Refuses to Stay Still
Cocoa’s recent slide is not a story of collapse, but of rebalancing—a shift from panic-driven highs to a more sober (if still historically elevated) reality. Supply has rebounded, inventories are flush, and demand has cooled as chocolate adapts to new price points. Tariffs and regulatory delays have only amplified the whiplash. Yet, with prices still double their long-term average and climate risks ever-present in West Africa, the next plot twist is never far away. For now, the market has come down from its sugar high—but in cocoa, the next craving is always just around the corner.