Cocoa Processing Reaches Lowest Point Since 2020 as Chocolatiers Face Challenges

Cocoa processing in Europe and Asia saw a downturn in the last quarter of 2024, indicating that chocolate manufacturers are struggling with skyrocketing prices and low inventories.

Figures released on Thursday showed a 5.4% decline in bean processing in Europe and a modest drop of 0.5% in Asia compared to the previous year. The fourth quarter grindings in both regions were the lowest since 2020, when the chocolate sector was affected by Covid-19 restrictions and trade disruptions.

The decline in both regions suggests that demand is not particularly robust, commented Steve Wateridge, head of research at TRS by Expana. “Given the current pricing situation, this shouldn’t come as a shock.”

Cocoa futures in New York fell by as much as 3.4% on Thursday, while the most-active contracts in London decreased by up to 2.8%.

Last year, cocoa prices almost tripled, making cocoa the top-performing major commodity, as ongoing supply shortages in Ivory Coast and Ghana, the world’s leading producers, resulted in an extraordinary supply deficit. Consequently, chocolate manufacturers have scaled back their cocoa usage while tapping into reserves to meet the steady demand for chocolate.

Recent reports indicate that total grindings in Europe, the largest consuming market worldwide, have dipped for the second consecutive year. Conversely, Asia’s total grindings for 2024 noted a slight increase. Data from North America, made available after market hours on Thursday, reflected a year-over-year decline of 1.2% in grindings.

Although grinding statistics—which show the transformation of cocoa into butter and powder used in numerous products like candy bars and ice cream—have traditionally served as a gauge of demand, the tight supply conditions have weakened this relationship. Nevertheless, market participants are closely observing these figures in anticipation of an even greater decline as chocolate producers grapple with the expensive task of replenishing stockpiles.

© 2025 Bloomberg

Stay informed with Moneyweb’s extensive finance and business news on WhatsApp here.