Cocoa outlook
Ivory Coast crop uncertainty keeps chocolate product costs volatile into Q4 2025.
Mixed signals on Ivory Coast's crop development are creating pricing volatility in your chocolate category. Port arrivals remain strong but physical market buying is subdued, signaling confusion about actual supply tightness. This uncertainty translates directly to your shelf: chocolate retail prices increased 54% compared to 2021 by mid-2025, and your suppliers are using supply uncertainty to justify sustained cost increases. Build cost models for your chocolate SKUs now: Understand the true cocoa cost component of each chocolate product (branded vs. private-label). This reveals whether your suppliers are justified in their pricing or simply capturing margin during uncertainty.
One retailer recovered $200,000 in rebates by understanding the actual cost breakdown and challenging supplier claims.
Early 2026: if Ivory Coast weather improves, wholesale chocolate costs could ease- but expect a 6-month retail lag
If rains stabilize Ivory Coast through January, cocoa costs should begin easing in H1 2026. However, industry data shows chocolate retail prices don't follow commodity prices directly - there's typically a 6-month lag before cost relief reaches shelves.
This creates a competitive opportunity: retailers who reduce shelf prices earlier than competitors will capture volume from price-sensitive shoppers before the market normalizes.
Use forecasts to plan your retail pricing calendar: Model three scenarios for your chocolate margins through 2026 based on Ivory Coast recovery timing and Ecuador supply growth. This tells you when and how aggressively to cut shelf prices to stay competitive.
Chocolate margins are being squeezed - plan to protect volume as competition intensifies.
Chocolate manufacturers are facing severe margin pressure and consumers are increasingly price-sensitive. Your retail competition is intensifying, and shoppers are trading down to value options.
When cocoa costs ease, move quickly on retail prices: Don't wait for all suppliers to reduce invoices before cutting shelf prices. Create watchlists comparing your supplier invoices to market indices so you can validate when costs actually drop, then reduce retail prices ahead of competitors to defend volume.
Cocoa Forecast
Commentary by Jamie Pakenham-Walsh
The weakness in cocoa prices throughout 2025 is potentially over extended.
While prices do remain in a long-term downtrend, a number of technical signals are warning of possible upside into the new year.
A break above the moving average would likely give us a signal to recommend hedging, but we will assess the fundamental situation again if/when that happens.
Expana creates specific, quarterly price targets two years out, along with fundamental graphs and technical models that substantiate the views.
Please contact Expana to get a view of how this works.
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