The global cocoa industry experienced a remarkable shift in 2024, driven by a combination of factors including climate change, declining production, supply shortages, and sustainability considerations. According to Trading Economics, the cocoa market price peaked at $12,906 in December, reflecting the trajectory of the global cocoa industry over the year.
Nevertheless, the industry is poised for more significant shifts in the new year. The commodity has faced numerous challenges in the last half-decade and is likely to encounter similar hurdles in the coming months. However, due to the increasing demand for chocolate and cocoa products, the market value is projected to remain high throughout the year.
In addition to sustainability, economics, technology, and social equity, this article explores the critical concerns that could shape the industry in the year ahead.
Economic Factors
Cocoa Price Volatility
The cocoa market has become increasingly susceptible to price fluctuations in recent years. Notably, 2024 was a record-setting year for the global cocoa industry, as prices surged to new highs due to inflation, supply shortages, and other supply chain disruptions.
Entering 2025, inflationary pressures, declining production, and economic uncertainties may continue to strain the commodity’s valuation. Conversely, improvements in these factors could drive a resurgence, strengthening cocoa’s price position in global markets.
Shifting Global Demand
Rising demand for ethically sourced and traceable cocoa products in major markets like Europe and North America will influence the cocoa industry in 2025. Moreover, the European Union Deforestation Regulation (EUDR) will likely affect supplies from West Africa, which produces over 70% of the world’s cocoa. Meanwhile, increasing consumption in Asia is expected to reshape supply and pricing dynamics, potentially shifting cocoa exports from West Africa to Asia.
Sustainability Challenges
Impact of Climate Change
Extreme weather conditions continue to threaten cocoa yields globally. West African countries like Ghana and Côte d’Ivoire experienced significant drops in production volume in 2024, largely due to disease outbreaks exacerbated by changing weather patterns. This trend is expected to persist in 2025 as climate conditions worsen.
Cocoa farmers may face declining productivity as traditional farming methods struggle to withstand unpredictable weather patterns. Regenerative farming practices like agroforestry and cover cropping offer potential solutions to this challenge but require significant investment and training, which may not be fully achievable in 2025.
Deforestation Pressures
Cocoa farming has long been associated with deforestation in West Africa. In response, global buyers and governments are advocating for stricter environmental conservation measures.
While 2024 saw the implementation of initiatives aimed at reducing forest degradation, the focus in 2025 will be on robust enforcement to ensure these initiatives have a meaningful impact.
EUDR Implementation
The European Union Deforestation Regulation, initially scheduled for full implementation on January 1, 2025, has been postponed due to concerns of inadequate preparation among supply chain stakeholders. Medium and large companies must now comply by January 1, 2026, while micro and small enterprises have until June 20, 2026, to meet the requirements.
Social Concerns
Child Labour in Cocoa Farming
Child labour remains a persistent issue in the cocoa supply chain, with millions of children across West Africa and other cocoa-producing regions engaged in hazardous work on cocoa plantations.
Global scrutiny of the supply chain is expected to intensify, prompting stakeholders to redouble efforts to address this problem. Programs like the Child Labour Monitoring and Remediation System (CLMRS) will lead sustainability initiatives, emphasizing children’s education and raising farmers’ awareness.
Fair Farmer Compensation
Despite the billion-dollar chocolate industry, many cocoa farmers continue to struggle financially, pushing some to seek alternative, often environmentally harmful, ventures. For example, some Ghanaian farmers are abandoning their farms for illegal gold mining operations, further threatening cocoa production in 2025.
Technological Advancements
In more technologically advanced cocoa-producing regions, 2025 may witness increased adoption of innovative farming tools such as IoT-enabled soil sensors and drones. These tools can help farmers optimize yields and reduce waste.
Export companies are also likely to expand their use of database management technologies for farm mapping and traceability requirements. This could drive the proliferation of Agtech solutions within the cocoa supply chain.
However, in regions like West Africa, technology adoption may remain a challenge due to cost and infrastructure limitations.
Consumer Trends
Ethical and Sustainable Consumption
In 2024, consumer awareness and prioritization of sustainability and ethically sourced products increased significantly. This growing trend favours brands that align with these values and possess certifications like Rainforest Alliance or Fairtrade, giving them a competitive edge in 2025.
Health-Conscious Preferences
The rising demand for sugar-free chocolate and other healthier options reflects a shift toward health-conscious consumption habits. This trend could boost demand for premium fine-flavor cocoa products, benefiting companies that source and distribute high-quality beans.
Predictions for 2025
Looking ahead, the cocoa industry in 2025 is set to navigate a mix of challenges and opportunities. Key trends include an increased emphasis on sustainability, price fluctuations, greater adoption of technology, and evolving consumer preferences. However, achieving a balance between environmental conservation, economic viability, and social equity will require contributions from all stakeholders.
Ultimately, the cocoa industry’s future depends on its ability to adapt to changing economic, environmental, and social landscapes. As we step into 2025, the industry must prioritize sustainable practices, equitable farmer compensation, and innovative technologies to ensure a prosperous and ethical cocoa ecosystem.
Let us work together to make 2025 a year of positive transformation for cocoa farmers, producers, and consumers worldwide.
