As global supply conditions remain tight, cocoa industry analysts predict that prices could rise to as high as US$9,600 per metric tonne (pmt) in 2025, a forecast that has already been surpassed.
In December 2024, cocoa prices reached a peak of US$11,925, signaling a dramatic price surge.
On January 8, 2025, March ICE NY cocoa futures closed at US$10,984.81 per metric tonne, reflecting a 1.68% decrease from the previous day. Meanwhile, cocoa prices in December 2024 hit US$10.32 per kilogramme, marking a 30.73% rise from November and a staggering 145.2% increase from December 2023.
This price surge follows a trend that began in 2024 when cocoa prices nearly doubled, reaching US$8,523 by mid-November from an initial US$4,916. The 73.4% increase has been driven by a combination of supply shortfalls in key cocoa-producing nations like Ghana and Côte d’Ivoire, along with the effects of El Niño on yields and growing global demand for chocolate.
As reported by Databank, “The European Union Deforestation Regulation (EUDR), effective in early 2025, will further restrict supply availability, likely keeping prices elevated amid strong global demand for chocolate.” The regulation, which mandates that commodities entering the EU market must be traceable and proven to be deforestation-free post-December 2020, aims to curb environmental degradation but presents substantial challenges for local cocoa farmers.
While the price hike benefits cocoa producers globally, Ghana’s cocoa industry has been hindered by inefficiencies at the Ghana Cocoa Board (COCOBOD), which has struggled to secure its annual syndicated loan from traditional partners. This financial shortfall, along with the introduction of the EUDR and traceability requirements, has meant that local farmers have yet to fully benefit from the soaring prices.
A key challenge in Ghana is the issue of land ownership and tree tenure systems, particularly under the Concessions Act, which vests naturally occurring trees on private land in the state. This creates disincentives for farmers to preserve trees, complicating their ability to meet the EUDR’s traceability requirements.
Smallholders, who make up the backbone of the cocoa industry, producing almost all of the country’s cocoa, are especially vulnerable to these changes. With over 800,000 cocoa farmers and 3.2 million people depending on the sector, traceability remains a critical hurdle. Many farmers are either unaware of the new regulations or lack the technical knowledge required to comply with traceability systems.
In this context, COCOBOD faces immense pressure to support farmers through these transitions, ensuring that they can meet the new requirements for entering the European market while safeguarding their profitability. The regulator must address these challenges head-on to prevent further disempowerment of the farmers who are vital to Ghana’s cocoa industry.