The dramatic decline in cocoa prices over the past 12 months is beginning to have consequences for future supply. Cocoa farmers in Brazil say they expect to cancel around 50% of planned industrial cultivation projects, as prices below $3,000/t make new investments unviable.

The projects had backing from major international players and covered a planned additional area of 75,000 hectares, with the potential to produce around 225,000 tonnes of beans by 2030. That would have been equivalent to nearly 5% of current total world supply.

A market caught in a difficult position

Current cocoa prices are not sufficient to finance existing farmers, let alone guarantee an increase in future supply. At the same time, with demand still weak, there is limited upside momentum to sustain the price recovery that would make longer-term investments viable again. As long as these conditions persist, the pipeline of new supply growth remains at risk.

Ghana adds another layer of supply uncertainty

Compounding the longer-term picture, Ghana’s cocoa marketing system is showing signs of financial strain. COCOBOD retains significant unpaid loans from the 2023/24 and 2024/25 seasons, and concerns are growing that this financial pressure could impact the regulator’s ability to purchase beans from farmers in the coming main crop season. If that materialises, world market availability could be lower than currently priced in.

Futures find interim low, but specs remain bearish

EU cocoa futures found an interim low around 2,000 GBP/t and have since recovered, with the May 2026 contract settling at 2,435 GBP/t on March 17, down 1.1% week-on-week. Despite the recovery, the speculative community retains a neutral to bearish bias, indicating the recent rally has not prompted a position shift.

Longer-term risks include a potential El Niño event in Q3, which NOAA currently assigns a 62% probability, and which could bring excessively hot and dry conditions to key West African growing regions.

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