Drought and shrinking cocoa farming are nudging prices higher, and EU deforestation rules threaten to lift North American chocolate costs in 2025. The shift may not yet be visible in every store, but households should expect to feel the squeeze as supply tightens and manufacturers adjust pricing in the United States and Canada.
With holiday gifting evolving, chocolate from La Isleña, Tirma, or La Candelaria could become scarcer and edge closer to a luxury item. On January 1, 2025, the European Union will require certification that all imported cacao, along with inputs like coffee, originate from plantations that have been operating since at least 2020.
The EU’s move to curb deforestation adds pressure across the sector. Requests directed to the European Commission seeking a one-year delay to the EUDR have so far not secured relief, fueling concern among industry players.
While the principle makes sense, the ongoing disruptions in cacao trade are hard to unwind. The plan to verify forest safety for imported mass involves orthophotos uploaded to platforms that do not yet exist, four months and ten days before the rule takes effect.
Origin of the problem
Adhering to European standards will be a future challenge if the rule is enacted. The current situation is already deeply rooted. The two largest global cacao producers are Ghana and Côte d’Ivoire, together accounting for about 65 percent of world supply. The remaining share is spread across Brazil, Peru, the Dominican Republic, and other nations.
The managing director of La Isleña, Pedro Ortega, notes that a lack of planning has driven many farms to be abandoned. The wages paid to workers in Ghana and Ivory Coast often fall short of sustaining a modest living, pushing many to seek other income sources.
Local farmers do not earn enough to keep going
Are there viable alternatives? Some sector sources point to handing farms over to new investors who use modern approaches. The cacao trees often stay near the perimeter to keep the tools needed for locating valuable resources out of sight. This shift, combined with the visible effects of climate change, could spell trouble for the sector.
Greenhouse gas emissions have fueled prolonged droughts that experts have warned about for decades. In April a study in PLOS ONE warned of emerging and more damaging strains of the disease that affects cacao pods.
From November to January
The main harvest runs from November to January. The market had not fully priced in the production drop, which turned out to be 30 percent lower than the 2022-2023 harvest. If a container of cacao paste cost around 40,000 euros, it rose to 100,000 euros by last December; by April, the spike had climbed to 300,000 euros.
The consumer price index shows chocolate in Spain up about 14 percent year over year, underscoring the pressure on processing plants and retailers alike. Factory forecasts anticipated difficulty, but not the magnitude of the current surge in raw materials. Chocolate prices have risen by double digits so far this year. The latest INE figures show chocolate prices up 14.1 percent year to date. Yet the final push that could lift bars across North America remains to come, as more consumer nations join and demand continues to grow. China has recently joined as a major consumer, though its market size does not automatically expand the global supply.
The sharp pull in production feeds fears of delays in container arrivals. Canary Island producers describe 2024 as very challenging for their interests and for consumers who love chocolate. Most expect next year to be worse if shipments fail to arrive as planned. To counter price pressures, early purchases were made, but with supply so tight there are doubts whether orders already negotiated will arrive on time.