What is the story about?
What's Happening?
The cocoa industry is currently experiencing high prices, which have remained elevated since April 2024. As the 2025/26 cocoa harvest season approaches, manufacturers are closely monitoring potential yield outcomes. According to Steve Wateridge, head of research at Expana, yields are expected to vary significantly between regions, with improvements anticipated in Côte d'Ivoire but declines in Ghana. The mid-crop, which occurs a few months later, is expected to be more positive, although confirmation will not be available until January. Despite some stabilization, structural issues in both Côte d'Ivoire and Ghana continue to drive global prices upward. Justine White, a cocoa analyst at Vespertool, suggests that manufacturers should capitalize on current prices, which have already factored in expected supply improvements.
Why It's Important?
The ongoing high prices and regional yield variations in the cocoa industry have significant implications for global chocolate manufacturers and consumers. The structural issues in major cocoa-producing countries like Côte d'Ivoire and Ghana could lead to sustained high prices, affecting profit margins for manufacturers and potentially leading to higher consumer prices. The situation underscores the importance of addressing these structural challenges to stabilize the market. Additionally, the demand for cocoa alternatives may increase if prices remain high, potentially impacting traditional cocoa markets. Manufacturers who strategically manage their supply chains and pricing strategies could benefit from the current market conditions.
What's Next?
The cocoa industry will be closely watching the upcoming harvest season to gauge the potential for yield improvements and price stabilization. Manufacturers may need to adjust their strategies based on the outcomes of the mid-crop assessments in January. The lack of government intervention in addressing structural issues in Côte d'Ivoire and Ghana suggests that high prices may persist unless significant changes are made. Stakeholders in the industry, including governments and manufacturers, may need to collaborate to find sustainable solutions to these challenges.
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