News of a first surplus in four years may change the tone of the conversation at the World Cocoa Foundation Partnership Meeting in São Paulo, Brazil, from March 19 to 20, 2025. At this meeting, experts will discuss how sustainable practices and resilient supply chains drive economic benefits for all stakeholders.
Anthony Myers
Cocoa prices have been on the defensive in the past seven days, mainly because the International Cocoa Organization (ICCO) forecasts a surprise global cocoa surplus of 142,000 MT for 2024-25. However, the industry's outlook remains cautiously optimistic.
Pam Thornton, a commodity trader at Nightingale Investment Management Limited, said: “At this point there is a range of about 250kmt between the forecasters – from 100kmt deficit to 150kmt surplus.
“The range was even wider but has narrowed over the last month as rains have returned to Cote d'Ivoire. The ICCO number is within the range, albeit towards the top end, and should not be a surprise as most forecasters have had a surplus since last summer.”
She explained that while the ICCO forecast is an important maker, “it does not conduct its own field surveys and its forecast does not represent a real change in their thinking.
“There is still another month’s setting to go, and the final numbers will be impacted by operators hoarding ahead of an expected price increase.”
Thornton will speak at a plenary session on world cocoa economics at the WCF Partnership Meeting on 19 March. She said: “It’s all eyes now on the setting for the 25-26 West African main crop, the rump of which will take place between the end of April and mid July.
“The industry will become more aggressive in terms of buying if the set starts poorly and show patience if it begins well.”
More investment and research needed in cocoa
At the Chocoa cocoa conference in Amsterdam last month, Thornton called for more investment in research and development to better understand and address the progression of crop disease (another critical topic at the WCF PM) and the impacts of climate change on cocoa production.
She also called for more investment for farmers to improve their productivity and the need to improve forecasting tools and make this information more widely available to the industry, rather than keeping it within a small group of private companies.
Thornton told cocoaradar.com, “We need the private forecasters to continue, and thankfully, they exist. However, it would be helpful for the market as a whole, especially origins, if more information could be made available, perhaps through the auspices of ICCO.
“Forecasts could be anonymized, shared and either averaged, or perhaps used to compile a range, and then disseminated widely … as right now most of the producing countries have no idea what is going on outside their borders.
“Ideally Cocobod and CCC [Ghana and Cote d’Ivoire’s regulatory bodies, respectively] would also contribute their data.”
It’s a message she will reiterate at the WCF Partnership Meeting. When Thornton speaks, the industry listens. She is an experienced physical cocoa and coffee trader with an in-depth understanding of the entire supply chain.
Her work has included setting up and managing export operations for large trade houses (Sucden/Phibro/Dreyfus) in many origins - West Africa, Asia and Latin America – to supply leading global chocolate manufacturers and coffee roasters.
She said the unexpected poor crop in 2023-2024 was initially thought to be a one-off phenomenon but has proven to be a significant long-term issue.
Was the industry prepared? “Definitely not,” she said. There was a slow market response to the poor crop, with prices rising significantly in the first quarter of 2024.
She said that the signs of the crisis had been evident for years but had not been adequately addressed. In her talk in Amsterdam, she highlighted the fragility of cocoa production, citing historical examples of crop failures due to diseases and pests.
A wake-up call for the cocoa sector
Surplus or no surplus this year, she believes the industry is in for a wake-up call with major producers like Cote d'Ivoire and Ghana having “plateaued or peaked in their production.
“I'm not saying that our current crisis will be sustained indefinitely, because markets do respond to change, but we are not going back to the era that we had for more than 40 years, with a very cheap supply of cocoa.”
Cocoa is a fragile crop, as Brazil knows only too well when its production was almost wiped out because of disease 30 years ago. Only now is it starting to recover
Even with large-scale mechanization and planting new trees in West Africa, Thornton says achieving maximum production will take six to seven years.
“So what we do today, we're not really going to feel the benefit itself for some years to come.”
Regarding forecasting, Thornton said she tries to collaborate with the ICCO whenever possible. In the early part of this century, she claimed that the industry stopped funding crop research as production was growing and questioned ‘why are we spending so much on research?’
She said the significant change now is “detrimental agricultural practices”, particularly regarding climate change. Illegal gold mining is a big problem in Ghana and is invading the cocoa space. It is also a growing problem in Cote d’Ivoire, she informed.
She said there is still very little information about crops in the public domain, but she is most worried about the talk about the futures markets being broken and not functioning.
“It's not the futures markets that are broken, it's the physical market that is broken,” she said.
Thornton recommends that the industry puts money into research science on how to deal with climate change and mitigate its effects, as well as how to deal with the abject state of the soil, particularly in areas like West Africa where it's been very hot.
“We need to equip farmers better, including planting materials so that we have higher yielding cocoa that is more resistant.”
Latin America
She said that in Latin America, the cadmium issue calls for more smart farming because it has become a problem. In Brazil Thornton will advise the sector that sustainable cocoa has been a mantra for years, but it's been more of a catchphrase than an objective, it has actively worked towards.
“All we have really been doing is tracing it. Too little has been spent on research and too much on PR. We need more factual and scientific information to ensure production is maintained, and even grow, in line with demand for our amazing commodity.”
- Pam Thornton will join the panel at WCFPM: Plenary session: World cocoa economics
- Registration and more information: Visit the WCF website for the full agenda and event details.
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