What is the situation of cocoa in 2026?
Updated:
29 DEC, 2025
By Joanna Piwko from RankiaPro Europe
The cocoa industry went through a crucial moment in 2025 and is now entering a new phase in 2026. With global demand historically growing between 2% and 5% annually, the sector has long been expanding, but it has also had to face serious challenges arising from climate conditions, crop diseases, and instability in international markets. The developments of the past two years confirm an uncomfortable reality for the cocoa market: volatility is no longer an anomaly, but an increasingly structural feature of the agricultural cycle.
Poor harvests and decline in global production
The 2024–2025 period was characterized by poor harvests, hit by torrential rains, sudden droughts, and the spread of plant diseases such as brown rot. The situation particularly penalized Ivory Coast, the world's largest cocoa producer, responsible for about 30% of global production, followed by Ghana and Indonesia.
In the Ivorian country, analysts estimated that the intermediate harvest was around 40% lower than the historical average, mainly due to drought and the decrease in fruit quality.
Global data confirmed the extent of the problem. According to the Cocoa Market Report published in July 2025 by the International Cocoa Organization (ICCO), global production had decreased by 12.9% on an annual basis, reaching 4.368 million tons, while end-of-season stocks had fallen by 28%. Climate effectively became a structural risk factor. Its growing unpredictability erodes the ability to anticipate harvests and introduces a permanent risk component into cocoa prices.
However, by early 2026 the market began to show signs of rebalancing. Updated ICCO estimates suggest that global production for the 2024/25 cocoa year could reach around 4.7 million tonnes, while grindings declined slightly, leading to a supply surplus of roughly 75,000 tonnes and the first rebuilding of global stocks after several years of deficit.
Prices at high levels, albeit more moderate
The combination of reduced supply and climate risks pushed prices to historic highs during 2024 and 2025. However, a moderation has been observed since late 2025 and into 2026.
One of the main reasons for this easing has been weaker demand, influenced by rising costs, especially for chocolate. Chocolate manufacturing companies passed on part of the cost increase to consumers through price rises and format changes, resulting in a drop in processing volumes in 2025, a trend confirmed by regional industry associations.
More recently, grind data has shown a decline of around 7.7%, indicating that manufacturers have reduced cocoa processing due to high input costs and the substitution of cocoa butter with alternative fats. Despite this, emerging markets and the premium chocolate segment are still expected to support long-term demand.
The easing of supply concerns and weaker demand have had a visible impact on the market. Cocoa futures have fallen sharply since the start of 2026, in some cases losing roughly half their value compared to the peak levels reached during the crisis. Prices have gradually moved closer to around $3,000 per tonne, a level more consistent with historical averages before the recent supply shock.
This relative normalization should not be confused with full price stability. Even a single irregular growing season could once again trigger strong market reactions.
The future of prices will still depend largely on what happens in Ghana and Ivory Coast. If the expected recovery in production is confirmed, prices could stabilize further; otherwise, supply constraints and quality shortages could push quotations higher again.
In the recent period, cocoa recorded one of the largest corrections among agricultural commodities, as the market reduced the extreme risk premiums that had built up during the supply crisis. Production data remained modest and demand showed signs of weakening, particularly in the second half of 2025. Substitution and demand reduction have been evident, especially during periods of high prices, and these adjustments may continue to influence market dynamics through 2026.
Nitesh Shah, Head of Commodities and Macroeconomic Research, WisdomTree
The current adjustment reflects a reduction of extreme risk premiums rather than a complete return to normal market conditions. Looking ahead, cocoa prices are more likely to move sideways within a wide range, marked by sharp swings, rather than follow a clean and sustained trend.
Structural problems and trade tensions
The sector also has to face fundamental challenges. Many plantations are old and have low productivity, and farmers often lack sufficient resources to renew them. These structural weaknesses reduce the sector’s ability to absorb shocks, making supply disruptions more frequent and amplifying price volatility.
This is compounded by external factors, such as trade policies and currency fluctuations, which can significantly influence global demand for cocoa and contribute to price volatility.
New players and diversification of supply
In the meantime, Nigeria is taking advantage of the supply gap in West Africa to significantly increase its own production. Indonesia and Brazil, on the other hand, are moving toward agroforestry models, higher-yield plantations and more sustainable production structures.
Another factor to consider is the growing demand for certifications and traceability, with increasing attention to initiatives aimed at combating deforestation and eliminating child labor in the cocoa supply chain. Traceability allows verification of origin and production conditions, while certification provides practical standards for remuneration, labor conditions, and environmental sustainability.
In an increasingly volatile market, these mechanisms are becoming both a moral and economic differentiator.
Cocoa, once perceived as a stable agricultural commodity, now reflects deeper global dynamics: structural climate change, geopolitical friction, and the growing need for resilient and transparent supply chains.
This article is for informational purposes only and does not constitute financial advice.
