Kakao Prices Experience Sharp Decline: Market Trends and Expectations

Sharp Decline in Cocoa Prices: Reasons and Consequences

The drought affecting the entire world, issues in agricultural production, and geopolitical developments continue to cause fluctuations in the commodity markets. Cocoa is among the agricultural products most affected by these fluctuations.

Historical Decline in Cocoa Prices

According to data from the Intercontinental Exchange operating in the USA, cocoa prices reached record levels in 2023, hitting $12,931 per ton. By the end of the year, prices closed around $11,675. Adverse weather conditions threatening crops in West Africa and the decline in global stocks had led to a significant rally in prices.

Current Status of Cocoa Prices

However, with the easing of drought concerns in West Africa and increases in yields, cocoa prices have begun to decline. Since 2024, cocoa prices have decreased by more than 55%, falling to levels around $5,160.

Expectations of Weakening Demand for Chocolate and Cocoa

The world's leading chocolate producer, Barry Callebaut, forecasts a weakening in cocoa products sales. The plan of the USA to remove tariffs on cocoa products has also been a significant factor increasing sales pressure.

Future Expectations and Trade Dynamics

Rabobank Commodity Analyst Oran van Dort noted that the USA has kept certain agricultural products, such as cocoa, which it consumes in large quantities but does not produce, tariff-free. The removal of tariffs on cocoa by the USA has reduced trade disruptions. Additionally, uncertainties related to Europe’s deforestation regulation may carry more potential for further declines in cocoa prices.

Dort emphasized that shipments to Côte d'Ivoire ports have been stronger than expected. The formation of low costs in the supply chain may have a positive impact on chocolate and cocoa prices.