Could Rising Cocoa Prices Be Sweet for Your Portfolio?

If you have a bit of a sweet tooth, then rising cocoa prices might be leaving a bad taste in your mouth. After hovering around the US$2,000 per metric tonne mark for years, the cost of the popular confectionary ingredient has been on the upswing since early 2023, largely due to supply disruptions. Prices hit a peak of around US$12,000 in April 2024, before pulling back to the US$8,000 to US$9,000 range. Many analysts believe prices will remain elevated for the foreseeable future, and while this could be tough on your cravings, could it potentially be sweet for your portfolio?

A bitter reality for cocoa farmers
The recent surge in cocoa prices can be traced to systemic factors and short-term shocks that are limiting the supply of the bean, although the warning signs were there before costs began to climb.

Prior to the main price spike in 2023, researchers and advocates were sounding the alarm over economic and sustainability challenges in the industry. At the time, cocoa farmers were getting low prices for their crops, which prevented many from investing in land or equipment. That contributed to lower yields while demand continued to rise. The challenge was particularly acute in West Africa, where much production is concentrated. According to a 2021 study¹ published in the journal Frontiers in Sustainable Food Systems, most cocoa producers in Côte d'Ivoire and Ghana – areas responsible for 60 per cent of the world’s supply – do not earn what the World Bank considers a living income.

Eating away at supply
Layered on top of the systemic struggles are the recent effects of climate change and disease in Western Africa. In recent years, El Niño- and La Niña-influenced weather patterns contributed to extreme weather events in the prime growing region, leading to droughts and excessive rainfall that lowered crop yields.

Diseases like cacao swollen shoot virus² and Black Pod disease³ have also devastated cocoa farms in the region. In early 2024, the Chief Executive of the Ghana Cocoa Board announced⁴ that the country had lost 500,000 hectares of cocoa farms to the swollen shoot virus alone – almost 40 per cent of the approximately 1.3 million hectares of cocoa planted in the country.⁵

In early 2024, major African cocoa processing plants in Côte d'Ivoire and Ghana were forced to stop or cut production⁶ because they could no longer afford the raw materials, kicking off a global supply shortage.

Struggling to keep up with demand
The world’s supply of cocoa may be slowing down but demand is only growing. The global chocolate industry is projected to reach nearly US$173 billion by 2030, up from about US$130 billion in 2024.⁷ The increased demand is driven both by growth in the European market, already the world’s largest purchaser of cocoa products,⁸ as well as the Asia Pacific, where chocolate sales have grown by about 5 per cent annually⁹ in recent years.

The higher demand and lower supply are having an impact on chocolate prices – and people’s wallets. In May, Nestle said it plans to raise prices on some of its chocolate products. Earlier, Mondelēz, which makes Cadbury and Toblerone, said it may need to raise its prices on some products too, either later this year or in 2026. More broadly, prices for sugar and confectionary goods in Canada, which includes chocolate, have increased by 28.8 per cent over the past five years.¹⁰

Unlike other commodities, cocoa doesn’t have a viable alternative that consumers can switch to when supply is constrained. While production has been ramping up¹¹ in other parts of the world – like Latin America, Ecuador and the Dominican Republic – West Africa remains the dominant producer.

Earlier this year, spring cocoa prices fell after the International Cocoa Organization forecasted a 7.8 per cent rise in annual global production and reported its first surplus in cocoa in four years.¹² Exports from Côte d'Ivoire are also up 13 per cent from last year, but supply remains constrained overall.

Executives from chocolate brands also suggested the higher prices have helped cool demand in North America and Europe as households cut back on discretionary spending in the face of uncertain economic conditions.

Cocoa’s ripple effect on investors
While cocoa isn’t typically a commodity people pay much attention to, at least compared to, say, oil or gold, prices changes can still have an impact on average investors. Some chocolate and candy companies have had to lower their earnings forecasts,¹⁴ for instance, while the stock prices of some publicly traded confectionary companies have been up and down as prices have moved. U.S. import tariffs are another wildcard that could put pressure on prices and impact confectionery businesses, and the consumers who the higher costs may be passed down to. But if factors like crop disease, climate change, farmer economic health and global demand for cocoa persist, analysts expect prices will remain elevated.

Whether you want to add a little cocoa to your portfolio is a personal choice. Cocoa trades on futures markets, but if you’re interested in gaining exposure to the commodity, you could search for ETFs or mutual funds that hold a broader basket of agriculture commodities that include cocoa. Another route is to seek indirect exposure to cocoa by investing in publicly traded companies that rely on cocoa, such as chocolate and candy makers. 

Sources
^1. _{Frontiers in Sustainable Food Systems, "A Living Income for Cocoa Producers in Côte d'Ivoire and Ghana?", October 2021}
^2. _{Reuters, "Cocoa swollen shoot disease worsening in Ghana, poses long-term threat", August 2024}
^3. _{Africa News, "Wet weather and disease hit African cocoa farmers, push up prices", August 2024}
^4. _{Cocoa Post, "Ghana Loses Over 500,000 Hectares of Cocoa Farms to Swollen Shoot Disease", February 2024}
^5. _{United States Department of Agriculture Foreign Agricultural Service, "Ghana - Cocoa Sector - 2025", March 2025}
^6. _{Reuters, "Exclusive: African cocoa plants run out of beans as global chocolate crisis deepens", March 2024}
^7. _{Mark Ntel, "Market Insights & Analysis: Global Chocolate Market (2025-30), January 2024}
^8. _{Government of the Netherlands, "What is the demand for cocoa on the European Market}
^9. _{Innova Market Insights, "Chocolate Market Trends in Asia Pacific", November 2024}
^10. _{Statistics Canada, "Consumer Price Index, monthly, not seasonally adjusted, June 2025}
^11. _{Confectionary News, "Latin America and Asia emerge as bright spots for cocoa supply in 2025", May 2025}
^12. _{Cocoa Statistics, "February 2025 Quarterly Bulletin on Cocoa Statistics", February 2025}
^13. _{United States Department of Agriculture Foreign Agricultural Service, "Côte d'Ivoire - Cocoa Sector Overview - 2025", March 2025}
^14. _{Food Dive, "Mondelēz, Hershey pressured by a prolonged spike in cocoa prices", February 2025}