Rising cocoa prices are shadowing big food’s financial outlook on 2025, despite most of the majors posting strong 2024 results this month.
Mondelēz International earlier showcased a good set of financial results, but caveated them with a warning that cocoa prices would bear down heavily on the business’s 2025 performance.
Unilever and Nestlé shared good results also but couldn’t ignore the fact rising cocoa prices were lurking in the background.
Cocoa prices have hit record highs over two consecutive months from December last year and January 2025, when it reached $10.75/kg.
The surge is the largest seen in over sixty years, commodity experts at WNS Procurement have said.
So why are the prices continuing to rise, especially as industry heads and analysts were predicting a positive turn towards the end of last year?
Read more:
- Unilever’s food performance sluggish, but ice cream shines
- Nestlé strong in Europe, despite declines in key areas
Bad weather conditions in West Africa, a major growing region and main EU supplier, have added to the pessimism.
The World Bank also estimates production has declined by 14% in the 2023-2024 season from 4.9 million metric tonnes to 4.2mmt.
That decline came mostly from a lower output from Côte d’Ivoire and Ghana, where 60% of the world’s cocoa is grown.
However, there is some optimism on the horizon as experts predict a better 2024/2025 growing season.
But will it be enough to lift Big Foods’ fortunes? We’ll keep you updated as the story develops.
