Cocoa is trading at record levels this month primarily due to a combination of supply constraints, market dynamics, and broader economic factors that have influenced prices over the past year. Although recent data shows some price corrections, cocoa prices remain historically high compared to previous years.
One key reason for the high cocoa prices is the significant price rally that began in early 2024, during which cocoa prices more than doubled. This surge was driven by supply shortages caused by adverse weather conditions, crop failures, and disease outbreaks in major producing countries such as Côte d’Ivoire and Ghana. These two countries, which dominate global cocoa production, had previously experienced shortfalls that tightened supply and pushed prices upward. The International Cocoa Organization (ICCO) reported a deficit in the 2023/24 season, which contributed to the price spike[1][2].
Despite the recent correction in prices, with a noted 3.6% drop to around USD 5,954 per metric ton in early October 2025, cocoa prices remain elevated compared to historical levels. This correction follows a two-year rally but does not fully reverse the gains made during the supply crunch. The price drop is partly due to Côte d’Ivoire and Ghana increasing farmgate prices at the start of the month, which is expected to encourage more sales and increase cocoa supplies, easing some of the previous tightness in the market[1].
Demand factors also play a role. While production is recovering, demand for cocoa products remains relatively weak, which puts downward pressure on prices. However, the overall market balance is delicate, and any disruptions in supply or shifts in demand can cause significant price volatility. The cocoa sector is also influenced by strategic pricing policies and investments in resilience by producing countries, which aim to stabilize the market over time[1].
Another important aspect is the impact of these high cocoa prices on the consumer market, especially in regions like the United States. The doubling of cocoa prices since early 2024 has led to increased costs for chocolate and candy products, contributing to inflation in the confectionery sector. For example, the Consumer Price Index for candy and gum rose by 8%, and many consumers are adjusting their spending habits due to higher prices. This inflationary pressure is partly due to the fact that chocolate products on store shelves were made from cocoa purchased at these record high prices earlier in the year[2].
Despite the high prices, the cocoa sector faces significant challenges, particularly for farmers. Reports such as the Cocoa Barometer 2025 highlight a paradox where record global cocoa prices coexist with persistent poverty among cocoa farmers. Many farmers do not benefit proportionally from the price increases due to factors like unfair contracts, crop failures, and climate shocks. This ongoing poverty contributes to broader issues in the sector, including deforestation, child labor, and gender inequality. The Barometer warns that without coordinated action, the current price boom could lead to oversupply and a subsequent price collapse similar to the crisis experienced in 2016[3].
Environmental concerns also intersect with the cocoa market dynamics. Cocoa-driven deforestation is expanding into new regions, threatening biodiversity and complicating sustainability efforts. The sector’s future depends on balancing production growth with environmental protection and social equity[3][4].
In summary, cocoa is trading at record levels this month due to a complex interplay of supply shortages caused by weather and disease, strategic pricing by major producers, recovering but still fragile demand, and inflationary pressures in consumer markets. While prices have recently corrected somewhat, they remain historically high, reflecting ongoing challenges and uncertainties in the global cocoa supply chain. The situation underscores the need for sustainable and equitable solutions to support farmers and protect the environment while meeting global demand for cocoa products.