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Cocoa Price Increase 2024: Thanks to El Niño?

prices soared, doubling in early 2024 compared to the previous year, and now tripled in March 2024. According to Straits Research, in March 2024, cocoa prices reached over $8,000 per metric ton, after increasing 100% in just two months from $4,000 per metric ton in January. For context, the price average was $2,500 in 2023 and $1,700 in 2022.

Meanwhile, cocoa futures breached $8,300 per metric ton by March 20th, 2024. As of now, cocoa price is the highest in 44 years. Overall, the surge in global cocoa price is due to a variety of factors including poor weather, diseases affecting crops, and speculation.

Graph of Cocoa May price (futures contract) fluctuations from Nasdaq.com

Cocoa Price Increase 2024: Blame the Weather

The root of the problem lies in supply shortages caused by unfavorable growing conditions in Western Africa, home to about 75% of the world's cocoa production. Diseases like black pod rot and swollen shoot virus, coupled with harsh winds and droughts, have significantly reduced yields. Heavier rainfall in the last crop season caused an increase in diseases among cocoa trees, and cocoa tree farmers in West Africa are facing dry temperatures and extreme winds from this year's El Niño.

Sand Dune Under Blue Sky

El Niño occurs on average every 2 – 7 years, with usually more than one event per period. This climate phenomenon affects countries near the equator, such as Central America, East Africa, West Africa, northern South America, and East Asia as well as the Pacific.

While the ideal rainfall for cacao trees is between 1,500 to 2,500 mm per year, El Niño caused it to decrease significantly. This reduced rainfall results in lower yields for cacao trees and potentially causes crop failure, hence leading to cocoa shortage. Historically, this same event has occurred in 2015-2016, also during El Niño. Dry weather severely stressed cacao trees and led to a decrease in cocoa yields and quality.

Nevertheless, the global demand for chocolate continues to rise, exacerbating the supply crunch. With the supply gap expected to persist, prices for cocoa—and consequently chocolate—are surging.

Cocoa Supply Shortage

Cocoa export from Ivory Coast fell 35% from last year. Quoting from Barchart.com, the () on February 29 projected that the global 2023/24 cocoa deficit would widen to -374,000 MT from -74,000 MT in 2022/2023. ICCO projects global cocoa production in 2023/24 will fall by -11% y/y to 4.45 MMT, and global cocoa grindings will drop by nearly -5%, which would push the 2023/24 stock-to-grindings ratio to the lowest in more than 40 years.

According to Reuters, by mid-March 2024, major cocoa factories in Ivory Coast and Ghana have stopped or reduce processing capacity and cacao bean prices soars. Transcao, a state-owned Ivorian cacao bean processor, had stopped buying beans because of its price.

Usually, in Africa, both traders and processor purchase cacao beans from local dealers up to a year in advance at pre-agreed prices. The market is usually heavily regulated by local government. However, during shortage, the system fell apart. Global traders rush to purchase beans, while local dealers pay farmers premium price to secure beans. This leaves almost no beans for local processors.

Black Pod Disease

Strong El Niño since June 2023 and global warming combined brings intense natural fluctuations in weather patterns. Both Ivory Coast and Ghana was hit by intense rains in the later part of 2023, leading to wet and humid conditions for cacao trees. This results in fungal infection called black pod disease, causing cacao beans to rot.

black pod disease ravaging West African cacaos (cocoa price increase 2024: source cocoa powder from Indonesia now, cocoanusa.com)

According to Maxar Technologies Inc, the total precipitation in West Africa since the rainy season started May 2023 has been more than double the 30-year average. Nevertheless, this year's Ghana's cocoa output is the lowest in 13 years, while Ivory Coast's cocoa production is the smallest in 7 years.

Global Effect of Cocoa Price Increase of 2024

Apart from the rising cacao beans and prices, all the aforementioned factors untimely lead to the increase of chocolate prices.

, maker of worldwide brands such as Toblerone and Oreo, will raise prices of their products this year. The reason is not only the increase in cocoa price, but also the increase in other commodity prices as well, such as sugar. Other chocolate product producers such as , owner of Haagen-Dazs, also declared the same plan. Some chocolate makers, however, decided to go the other route, by using less cocoa and making smaller candies or bars to cope with the increasing raw material costs.

chocolate manufacturers create smaller products due to raw material price hike, cocoa price increase 2024: source cocoa powder from Indonesia now (cocoanusa.com)

Cacao beans scarcity affects all parts of its subsequent supply chain. Before becoming , cacao beans were processed into cocoa powder by cocoa processors around the globe. Guan Chong, a leading cocoa processor located in Malaysia, who usually import cacao beans from West African producers, is now sourcing cacao beans from Ecuador, Peru, and Indonesia. In order to keep its plants operating, cocoa grinders have to pay premium, about $400 to $ 500 extra per ton, to obtain beans. Guan Chong CEO commented that the current cacao frenzy is unprecedented in his long term career in cocoa industry.

Historical Cocoa Price Surge

Looking back at cocoa price history, the latest cocoa price rush is the highest since the price surge of July 1977, when the commodity reached a peak of $5,379 per ton. The price increased tenfold from roughly $500 per ton in 1971.

Graph showing the cocoa futures price (source: barchart.com), cocoa price increase 2024: source cocoa powder from Indonesia now (cocoanusa.com)

The cocoa price increase in July 1977 was also primarily caused by cocoa supply shortage due to crop failure in West Africa. There were at least two seasons of poor crops and harvest leading to the high price period. This resulted in a drop of cocoa beans consumption to 1.3 million tons from about 1.6 million tons in 1973.


Speculation plays a role, with hedge funds and other financial entities betting on further price increases, thus driving prices even higher.

white paper with green line

There are calls for action, with industry groups urging governments to intervene. Possible measures include stockpiling beans, providing aid to farmers, investing in disease-resistant cocoa varieties, and exploring new growing regions.

When Will Cocoa Price Returns to Normal?

According to multiple sources, cocoa price will remain high through 2025. El Niño can last up to 18 months, has a well-known impact on crop yields, affecting commodities prices in the short to medium term. Considering most of major cacao plantations are located in areas that are heavily impacted by El Niño, cocoa price could remain abnormally high for at least another year.

The Alternative Solution: Sourcing Cacao Beans and Cocoa Powder from Indonesia

As the global cocoa market navigates through the turbulence of price surges in 2024, finding sustainable and cost-effective sources for cacao beans has become paramount for chocolate companies and cocoa powder grinders. Amidst this search, Indonesia emerges as a viable cacao supplier choice, offering an alternative solution to the supply chain woes caused by the price spikes in West Africa.

Indonesia, known for its rich volcanic soil and tropical climate, presents an optimal environment for cacao cultivation. The country's cacao beans are renowned for their unique flavor profiles, contributing to a diverse range of high-quality cocoa powders. This geographical advantage positions Indonesia as a viable contender in the global cocoa market, especially in times of supply shortages elsewhere.

cocoa price increase 2024: source cocoa powder from Indonesia now (cocoanusa.com)

For cocoa powder importers and chocolate companies looking to navigate the current market dynamics, Indonesian cocoa powder stands out not only for its quality but also for its economic feasibility. Recognizing the potential of its cocoa sector, the Indonesian government has implemented a price-dependent export tax of 5% to 15% on cacao beans. This policy is designed to encourage domestic processing and boost the value-added cocoa industry within the country. As a result, Indonesia has seen a significant increase in its capacity to produce and export cocoa powder, aligning with global demand for more diversified sources of cocoa.

To our valued clients in the cocoa powder importing and chocolate products manufacturing sectors, we offer an extensive range of premium Indonesian cocoa powder. Our products, derived from the finest cacao beans Indonesia has to offer, are the perfect solution for those seeking to diversify their supply sources amidst the 2024 cocoa price surge. By choosing Indonesian cocoa powder, you're not only ensuring the continuity and stability of your supply chain but also embracing a product that meets the highest standards of quality and flavor.

cocoa price increase 2024: source cocoa powder from Indonesia now (cocoanusa.com)

Without export tax on cocoa powder from Indonesia, our position as a direct supplier of Indonesian cocoa powder allows us to offer competitive pricing and reliable delivery schedules. This strategic advantage ensures that our clients can benefit from cost-effective procurement without compromising on quality. We invite you to explore our offerings and consider Indonesian cocoa powder as your strategic choice in these challenging times.

For inquiries and more information about our cocoa powder products, please feel free to contact us. Together, let's navigate the complexities of the current market and unlock new opportunities for growth and innovation with Indonesian cocoa powder at the core of your supply strategy.

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