What is driving cocoa's sweet price?

Ole Hansen
Head of Commodity Strategy

Summary:  Cocoa is experiencing a sweet surge - not in flavour, but in its market value. Discover the factors driving up cocoa prices by exploring the complexities of supply shortages, rising production costs, and how these elements intertwine to shape the current cocoa conundrum.

Understanding the surge in cocoa prices

In the realm of food commodities, witnessing a sharp increase in prices is a rare event. Yet, this is precisely what's unfolding in the cocoa market. Over the past year, NY cocoa prices have soared by more than 200%, including a notable surge of 97% just in this year. The London based cocoa future has rallied even stronger, with the May 2024 futures contract up 105% YTD. 

This significant uptick can be traced back to a combination of factors, especially in West Africa. Here, the Ivory Coast and Ghana are recognised as the leading global producers of cocoa beans. The past year has introduced challenging weather conditions in these countries, particularly intense heat, which has negatively impacted cocoa production. 

Furthermore, the escalating costs of pesticides and fertilisers have imposed financial strains on farmers, making it harder for them to procure these vital components for crop maintenance. Complicating matters are the pests that have targeted cocoa plants, further diminishing yields.

Impact of surging cocoa prices on traders and investors

The prevailing circumstances pose an interesting scenario for traders and investors alike. With cocoa production witnessing a downturn—evidenced by a 40% decrease in arrivals at Ivory Coast ports compared to the previous season—the supply chain has felt the pinch. This reduction in supply occurs as a significant portion of the cocoa is pre-sold to companies and manufacturers of cocoa and chocolate products. Faced with the challenge of fulfilling these commitments, these entities are compelled to look for alternative sources. This scramble for cocoa has led to a squeeze in the futures market for cocoa prices.

Consumer impact of rising cocoa prices

From the consumer's standpoint, the immediate effects of the spike in cocoa prices might not be directly noticeable. Typically, it can take anywhere from 6 to 12 months for such price hikes to be reflected in the retail pricing of products. Nevertheless, in the forthcoming period, consumers should brace for an uptick in chocolate bar prices.

Additionally, the trend of shrinkflation is likely to become more pronounced. This practice involves reducing the size of chocolate bars or the quantity of chocolates in a package while keeping prices constant. Consequently, while there might not be a stark rise in the price tags of chocolate items, the quantity offered for the same price will see a reduction.

Edit note: Performance data for cocoa updated March 19, 2024.  


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.