Over the past few months, the global cacao market has been rocked by a dramatic rise in prices. While cacao prices often experience seasonal fluctuations, this recent spike is unlike anything seen in recent years. The root cause of the problem can be traced back to West Africa’s two largest cacao producers, Ghana and Ivory Coast, where failed harvests have drastically cut global supply.
What Caused the cacao Crisis?
The core issue stems from poor yields in Ghana and Ivory Coast, which together produce more than 60% of the world’s cacao. This year's harvest failed primarily due to poor maintenance of the cacao trees, many of which are grown in monocultures. Cacao is a shadow-loving plant that typically thrives under the canopy of taller trees.
However, the intensive monoculture practices in these regions make the crops more susceptible to diseases and reduce soil fertility, leading to lower yields. In fact, experts have pointed out that this practice is contrary to the natural requirements of cacao, making it an inherently fragile system.
But climate change has also played a significant role. Erratic rainfall patterns and rising temperatures have put additional stress on cacao trees, making them even more vulnerable. Warmer conditions have also led to an increase in pests and diseases that damage the crops. These climate challenges compound the issues of poor farming practices, making the crisis even more severe.
Another major factor is the lack of investment in sustainable farming practices.
Many of the small-scale farmers who produce the majority of the world’s cacao lack access to training, resources, and financing to implement better farming techniques. Without diversified income sources or proper support, they are unable to maintain their farms, making each harvest more vulnerable.
The Impact on Prices
As a result, cacao prices have soared. In Ghana, the government recently announced a staggering 129.36% increase in the producer price for the 2024/25 season, which has jumped from 20,928 GHS (around €1,715) per tonne to 48,000 GHS (approximately €3,930) per tonne.
This increase is meant to support local farmers who are struggling under rising costs, but it also means higher prices for manufacturers and, ultimately, consumers worldwide.
Even though we at Cacao & Spice don’t source much of our cacao from West Africa, the ripple effects are being felt everywhere.
With global cacao supply falling significantly short of demand, prices have increased across all producing regions. South American producers, like those in Ecuador and Peru, are seeing a spike in demand for their beans, but this has come with its own set of challenges as prices there have also skyrocketed.
Why Are Prices Rising for All Producers?
Interestingly, not all farmers benefit equally from these high prices. In Ghana and Ivory Coast, government price controls mean that local farmers only receive around 40-50% of the global market price.
In contrast, South American farmers, who operate in less regulated markets, can capture up to 90% of the market value. The disparity is a direct result of how these markets were set up historically, with West Africa positioned primarily as a raw material exporter during the colonial period. Today, these countries still struggle with that legacy, leading to increased vulnerability to global price fluctuations.
What This Means for Chocolate Lovers
So what does this mean for you, the chocolate lover? Simply put, we are likely to see a continued rise in chocolate prices across the board. Even for ethically sourced chocolate, where farmers receive a fairer share, the extreme shortage in cacao means that costs are rising. For many companies committed to paying fair prices, this could lead to difficult decisions around passing costs on to consumers or absorbing them.
While some industry players are looking towards alternatives like lab-grown cacao, this solution is far from perfect. Many argue that the move away from traditional cacao farming further marginalizes the very farmers who rely on this crop for their livelihoods.
It’s a complex issue, but at Cacao & Spice, we believe that the long-term solution lies in investing in sustainable and diversified cacao production—not turning away from it.
As we navigate these challenges, our commitment remains to source ethically and support fair incomes for our farmers. We will continue to keep you informed about the evolving cacao market and its impact on our beloved chocolate products.
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