👉 Background: Cocoa is the core ingredient in chocolate for many of our favourite brands and 60% of the world’s cocoa supply comes from West Africa, particularly the Ivory Coast and Ghana. For context, in mid-2022, the price of cocoa was around $2,300 USD per tonne. By late 2024, the price of cocoa hit $12,000 USD per tonne — or 5x times price of cocoa from mid 2022.

‍👉 What happened: Now, cocoa prices have officially hit their peak and have now slid to below $7,400 per tonne. The reason? Better weather in Ivory Coast and growing production in Ecuador are boosting supply. But also, the demand for chocolate has actually softened.

‍👉 What else: This is expected to be good news for chocolate-lovers since the commodity prices often flow on to us, as consumers of the chocolate delicacy.

‍What's the key learning?

‍💡When supply shocks collide with growing demand, prices often skyrocket. And for cocoa, this means it has flowed straight into your supermarket choccy aisle. In fact, a standard 180-gram milk chocolate block has jumped 25% over the past two years.

💡Prices of commodities, like cocoa, are driven by a tug-of-war between supply shocks (like weather changes and crop diseases) and demand shifts (like changing consumer tastes). The challenge is that agriculture crops can take years to grow, so supply can’t instantly react to demand.

💡But the other challenge is that once customers adjust to a new price, brands don’t want to give up margin. So while the cocoa market is easing, we may not get the same sweet relief at the checkout.