Decoding the Global Cocoa Crisis: How does it Affect the Indian Chocolate Industry and Food Market?

Your favourite chocolate bar will soon be more expensive. Why, you ask. The short answer; skyrocketing prices and severe shortages of cocoa beans. The long answer; ageing cocoa trees, diseases, and fluctuating weather patterns. Read on to know more.

Srushti Pathak
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Cocoa Crisis

Whether you prefer a decadent chocolate cake or just your favourite chocolate bar, this food is known as ‘Food of the Gods’ for a reason. And while you could have put it under the title of indulgence earlier, chocolates are soon shifting base to the luxuries category. 

We all want to know why this sudden change. For years, the cost and supply of cocoa had remained relatively stable, making chocolate an accessible luxury for consumers around the world. However, a drastic shift has occurred, leaving the industry grappling with skyrocketing prices and severe shortages of cocoa beans.

Industry Insights

Chocolate Dessert

We connected with Patricia Cosma, co-founder of The Indian Cacao & Craft Chocolate Festival and founder The Craft Chocolate Shelf. She said, "The commodity cocoa prices increased because of climate change affecting the production in the African countries like Ghana, Ivory Coast which are the biggest cocoa suppliers in the world. Their production started decreasing 3 years ago and this year we are seeing a culmination. The increase of prices in commodity cocoa are impacting the specialty cocoa market as well. In the long run, I believe we’ll see some positive changes coming from this crisis."

Local Samosa also asked Tarun Sibal, Chef, Entrepreneur and Co-founder of Khi Khi, about what’s happening with cocoa prices globally and how they are affecting chocolate brands, chefs, restaurants and then ultimately the consumer. He said, “The non availability of good chocolate and increased values, as prices of cocoa have risen 4 times in the last one year, has impacted business across formats. The chocolate play across my menus has become a bare minimum and it’s now at an increased cost. As a chef, I also have to think beyond chocolate when it comes to my desserts section. It’s a global crisis, and I hope all stakeholders work together to rectify the scenario and strengthen the ecosystem.”

Cocoa Beans and Africa

Cocoa Farmer in Africa

In early 2024, cocoa prices surged to over $11,000 per metric ton. This is a figure that’s nearly three times higher than the average prices since the 1980s. This upheaval was triggered by a combination of aging cocoa trees, diseases, and fluctuating weather patterns. This is particularly true in Ivory Coast and Ghana, which are responsible for about half of the global cocoa supply. These countries have seen their production plummet due to black pod disease and irregular rainfall. This has pushed the market into a volatile state where prices are at the mercy of speculative trading and reactive supply chain moves.

Ninety percent of the world’s cocoa beans are harvested on small, family-run farms with less than two hectares of land and an average yield of just 600-800 kg per year. Most of this cocoa comes from West Africa.

For much of the past decade, the price of cocoa in one key global benchmark hovered around $2,500 per metric ton. In 2023, after poor harvests in West Africa, the price began to creep up, rising to $4,200 per ton by December. This threshold hadn't been crossed since the 1970s.

Cocoa Shortage


The current cocoa shortage is the result of a blend of storm of environmental and economic factors. A combination of low rainfall, plant disease and ageing trees led to a disappointing crop in Ivory Coast and Ghana in 2023. For instance, in Ghana, a major cocoa-producing country, black pod disease has severely affected crops, exacerbated by a season of poor weather that further diminished the harvest. 

The two countries produce about two-thirds of the world's cocoa, so the shortage hit the global market hard. Additionally, the market dynamics have been heavily influenced by speculators, including prominent figures like Pierre Andurand, a hedge-fund manager known for oil trading, who entered the cocoa market recognizing the potential for significant profit.

There's no quick fix for this. Cocoa trees take years to produce fruit, giving farmers little incentive to plant more since they don't know what the price of the crop will be when the trees bear fruit. Some may prefer to use more of their land for growing rubber or mining gold.

Who Sets the Price?

Cocoa Prices

In Ghana and Ivory Coast, the government sets a seasonal rate that cocoa farmers are paid, in an effort to protect them from volatility in global prices. After market prices spiked in April, the Ivory Coast's Agriculture Ministry agreed to raise that rate for the rest of the season, but it is still far less than the increase in global commodity markets. In other countries, farmers are paid market rates.

But big buyers, such as Hershey and Mondelez, and commodity traders buy and sell cocoa on global exchanges, where they trade physical beans as well as futures contracts that can require them to take delivery of beans at a future date. It's in the global exchanges that prices have become disconnected from the reality on the farms.

The After Effects

Expensive Chocolate

As cocoa prices reached record highs, surpassing $11,000 per metric ton, and forecasts suggesting potential climbs to $20,000, the operational viability of many chocolate producers has been threatened. The International Cocoa Organization recently forecasted that global production will trail demand by 374,000 tons this season, which ends in September, after a 74,000-ton shortfall last year.

The global benchmark for cocoa is a futures contract traded on the Intercontinental Exchange. Here, a buyer of that contract is agreeing to a price for a metric ton of cocoa beans to be delivered to one of several ports in the eastern United States. One big factor behind the price spike this year is that futures contracts are settled with the physical delivery of the cocoa. This means traders who are selling the contracts need to keep large reserves of cocoa beans on hand. That can result in an upward spiral, as traders are forced to buy more cocoa to replenish their inventories.

Are Chocolate Bars Safe?

Cocoa Farming

Chocolate prices are mostly rising. Until and unless we adopt a comprehensive approach to agricultural innovation and supply chain management, this issue might take a long time to resolve. The crisis has revealed the critical importance of supporting cocoa farmers more robustly. Environmental sustainability must also be a priority, with the industry needing to combat the deforestation and environmental degradation that often accompanies cocoa farming.

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