Cocoa Prices

Cocoa Prices

Empty Oceans

Before getting into the exciting developments of current cocoa prices, let me tell you about an experience I had with another food source. I was sitting in a very popular seafood restaurant in Toul Svay Prey, a central area of Phnom Penh in Cambodia. The restaurant was owned by a Vietnamese family, but this didn’t seem to bother any of the many Cambodian customers, despite the fast-rising anti-Vietnamese sentiment currently in Cambodia. They all came for the best seafood in town, freshly caught in the Gulf of Thailand and not—as is becoming more and more common—bought from fish farms. The place was crowded, and small groups were patiently waiting in line as a continuous line of waiters brought in loads of fish and seafood. I don’t know how much fish this restaurant is serving every night, but I can imagine it is a truck full. When I saw all these Cambodians enjoying the fantastic dishes, I suddenly realised how much more fish we as humans are consuming now. If you think about it, you can easily imagine that there will be no fish left if we keep increasing our fish consumption at this rate. Prices for fish food might go up quicker than one would hope for.

Rising Middle Class and Declining Poverty

It is not just fish that is being consumed at an increasing speed. Every food commodity is being confronted with the same growing demand. There are three demographic reasons for this:

  • The world population is still growing. According to a report by the UN DESA, the current world population of 7.3 billion will reach 8.5 billion by 2030, 9.7 billion by 2050, and 11.2 billion by 2100. All of these people will need to eat.
  • Poverty is declining. In the past 35 years, the number of people living in extreme poverty fell from 75% in the past to 11% of the total global population in 2013. Right now, extreme poverty has probably sunk below 10%, as a report on ‘our world in data’ is showing.
  • The middle class is rising, and 3.2 billion people, 42% of the world population, have already become part of the middle class. This number is increasing by 140 million people per year. The World Bank defines the global middle class within a large income range— anywhere between $11 and $110 a day. According to, 88% of these 140 million annual newcomers are born in Asia. Members of the middle class like to consume more. They not only want to buy their first fridge or car, but they also like to eat more (and they also like to eat sweeter foods).

Healthier Food Choices

Food commodity prices are still not impressing investors at this moment, but this is definitely going to end sooner rather than later. Members of the middle class tend to pay more attention to their food and eat healthier, despite their growing taste for sweets. There is a rising interest in special food products with more health benefits. Check out the supermarkets in Southeast Asian capitals like Kuala Lumpur and Bangkok, and you will notice that for almost every food product, you get more and more choices. Take cooking oil for instance. Before, you had maybe two or three different olive oils to choose from. Now you can find at least 10 different ones in addition to healthy newcomers like rapeseed oil and avocado oil.

Cocoa Prices Still at Historical Lows

From an inflation perspective, cocoa prices are still far below the global inflation rate. It reached its highest historical levels in the second half of the 1970s and was never able to beat those peaks again. The price of cocoa spiked to over $4,200 per metric ton at the end of the seventies, and it experienced a disappointing two decades before taking off again in the early 2000s. A temporary, yet still lower, height was reached in 2010–2011, when it climbed up to $3,500. This was again followed by a nosedive that brought the commodity out of favor with most investors.

Cocoa Becoming a Raging Long-Term Bull

Citigroup predicted that in April 2018, the supply of cocoa will be at its lowest in a decade. Dryness is plaguing the crops in Ghana and the Ivory Coast, and these two countries are responsible for more than 70% of the world’s cocoa supply. Indonesia is struggling with declining yields due to crop diseases, aging trees, and better returns for other commodities.

Shawn Hackett, president of Hackett Financial Advisors in Boynton Beach, Florida, is warning that “the longer time passes by and the more El Nino weather impacts begin to run the global weather patterns, the more bullish this [cocoa] market will become.”

How high the cocoa price will go is, of course, very difficult to predict; although the University of Ghent in Belgium had the courage to forecast cocoa prices as high as $14,000 per metric ton by 2025.

So, whether you are a chocolate consumer or a cocoa farmer, you’d better fasten your seatbelt and prepare for the cocoa price ride of the decade—or maybe even of the century.

If you are interested in learning more about the first Cambodian cocoa, feel free to message the company at or to visit their website at

We grow cocoa beans in Cambodia and will eventually either create or support a Cambodian bean-to-bar brand. What Cambodia is still lacking – local chocolate brands – has already taken off in many other countries in Asia.

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