Cocoa prices jumped again on Wednesday after the International Cocoa Organization (ICCO) said a survey of global cocoa stockpiles at the end of the 2023-24 season showed that they were at 1.041 MMT, down 36% year over year and lower than a previous estimate of 1.300 MMT. The ICCO signaled that in its next bulletin at the end of February, its 2023-24 global cocoa deficit estimate of -478,000 MT might be even more significant than initially projected.
Last Wednesday, NY cocoa posted a 3-week high, and London cocoa posted a 5-week high on crop production concerns in West Africa. In a report on the Nasdaq website, forecaster Maxar Technologies said this year's seasonal Harmattan winds are the driest in six years, worsening crop conditions.
Withering cocoa pods
Reports from West Africa suggest that leaves on cocoa trees are turning yellow, and the cherelles (cocoa pods) are withering.
Prices have soared more than $11,000 a contract in two weeks, indicating growing concerns about the 2025 West African mid-crop and potentially the main crop.
Jim Roemer owns the site www.bestweatherinc.com, and is a registered trading advisor, said, “The crop problems never end in West Africa. In my opinion, this is brought on more by climate change than by El Niño or La Niña events. Humidity levels and rainfall will remain below normal, thus hurting more of the cocoa crop.”
Fairtrade upgrades its Living Income Reference Prices
Fairtrade has announced its new Living Income Reference Prices for cocoa in West Africa, responding to the rising cocoa prices.
The new reference prices, calculated in local currency, are converted to $2.68 per kilo of cocoa from Ghana, a 26% increase over the previous one, and €2.65 ($2.80) per kilo from Cote d’Ivoire, a 20% increase.
As Fairtrade does with its minimum price, the Ivorian reference price is set in euros instead of US dollars to reduce the effect of exchange rate fluctuations between dollars and the local currency.
Benchmark for the chocolate industry
These prices serve as a benchmark for the chocolate industry. They are the minimum price a farmer should be paid to earn a living, meaning they can afford nutritious food, decent housing, education, transportation, and other essentials.
Fairtrade said the final values in the price calculation were thoroughly reviewed and endorsed by cocoa stakeholders in both Cote d’Ivoire and Ghana.
The new references will take effect on 1 October 2025, when Fairtrade will publish any applicable differential if the government-set farmgate prices have fallen below the reference prices.
“We are pleased to share the update on these reference prices, which over the past five years have become an important part of the cocoa landscape and conversation on living incomes,” said Carla Veldhuyzen van Zanten, Fairtrade International’s Senior Advisor for Sustainable Livelihoods. “We started this latest review when global market prices were much lower, and paying a Living Income Reference Price meant significant additional payments that not many companies were prepared to commit to.
“Today, we see the cocoa industry paying even higher prices, so there is no longer an excuse to purchase cocoa beans below this benchmark even when the market prices eventually drop.”
Given the extreme volatility of cocoa prices, today’s extreme prices are expected to not hold in the long term. The reference prices will remain an essential stabilising factor for farmers when market prices drop since market uncertainty makes farmers reluctant to invest in their farms to improve productivity.
KitKat V bar hits the dust
Nestlé revealed during 'Veganuary’ that it will discontinue the vegan version of its popular KitKat chocolate bar due to slowing sales, which has caused some sadness and incredulity at the timing of the announcement.
We at CocoaRadar are not vegans, but we sampled the bar when it was launched in 2021 and were very impressed with its taste and texture, and it's a blow to the plant-based confectionery market.
A spokesperson for Nestlé told The Plant Base website: “We know that KitKat Vegan has been popular for those looking for dairy or vegan alternatives. Unfortunately, global demand has been reducing to the point that production is becoming increasingly complex, and we have now made the difficult decision to discontinue the product.”
KitKat V will be removed from all markets; however, the spokesperson confirmed to Plant Base that it would still be available in the UK and Ireland “until the summer.”
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