The rise in the cocoa price seemed unstoppable for months. But by mid-April the bubble had really burst. Since then, the price of a ton of cocoa has completely collapsed, falling by almost a third.
While at its peak a ton of cocoa had to yield more than 12,000 dollars, it is now more than 8,200 dollars. The price is now at its lowest point since March this year. However, the price is still many times higher than was normal in 2023. That year, the price of cocoa fluctuated for a long time between $3,300 and $3,800 per ton.
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The earlier advance was started by poor harvests, partly due to diseases and extreme weather conditions. Processing plants in the West African region were also closed. In addition, new stricter EU rules were introduced, making it more difficult for European importers to purchase cocoa beans.
Short on money
As the situation became more precarious, there was also heavy trading in cocoa contracts by speculators trying to profit from the bubble. As often happens with bubbles, at some point it burst. It became unaffordable for traders and led to a lack of liquidity. “Indications that commercial companies are postponing some of their purchases of West African cocoa until next season have put pressure on the cocoa market,” reports the financial platform Hightower Report.
