Cocoa Prices Halved... When Will Chocolate and Chocolate Snack Prices Drop?

Halved in Just One Year
"Current Downward Trend Expected to Continue"

As the price of cocoa beans, the key raw material for chocolate, has plummeted to half its value over the past year after a period of soaring highs, there is growing interest in whether this will lead to changes in chocolate prices.

On January 6, Yonhap News reported, citing the African-focused French publication 'Jeune Afrique,' that as of the end of last year, the price of cocoa stood at $6,000 per ton, down by half from around $12,000 per ton a year earlier.

Anthony Fountain, Director of the civil society group 'Voice Cocoa Network,' which advocates for sustainable cocoa production, said, "Cocoa prices surged sharply over the past year and then plunged," adding, "The current downward trend is expected to continue."

Cocoa stock photo Pixabay

He also pointed out that, compared to demand, oversupply could cause prices to crash again in two to three years.

In fact, until just a few years ago, cocoa prices remained relatively stable at around $2,500 per ton. However, starting in 2023, prices began to soar, reaching an all-time high of $12,931 per ton in mid-December 2024.

The main reason cited for the price surge is the production disruptions in C?te d'Ivoire and Ghana, which together account for about 60% of global output. These disruptions were caused by a combination of drought due to El Ni?o and the spread of pests and diseases.

However, Fountain also considered the possibility of further major market volatility in the future. He noted, "The cocoa market fluctuates periodically, and producers are facing the growing impact of global warming," predicting that, for these reasons, a 'perfect storm' of simultaneous crises could strike again.

The decline in cocoa prices has also drawn attention in South Korea. Park Sangjun, a researcher at Kiwoom Securities, analyzed in a November 2023 report on Lotte Wellfood that "global cocoa prices have fallen to half their peak levels due to accumulated declines in demand and the Ghanaian government's increase in its procurement price." He further assessed, "As global cocoa prices stabilize and the effects of price increases for core products are added, Lotte Wellfood's profitability is expected to improve in earnest."

It remains uncertain whether the drop in cocoa prices will translate into lower chocolate prices. Confectionery companies point out that the prices of raw materials already contracted remain high, and that current prices are still higher than in the past, making it difficult to immediately lower product prices.

Previously, in February 2023, Lotte Wellfood raised prices on 26 products, including Pepero, Crunky, and Ghana Mild. As of last year, Lotte Wellfood held a 37.2% share of the domestic chocolate market, ranking first in the industry, with chocolate products accounting for about 30.0% of its domestic confectionery sales.

Orion also raised prices on 13 products, including a 20% increase for Choco Song-i and Bichobi, at the end of 2024.