Ivory Coast, also known as Côte d'Ivoire, stands as a monumental player in the global cocoa industry. This West African nation not only leads the world in cocoa production but also plays a crucial role in shaping the chocolate industry worldwide. The significance of cocoa in Ivory Coast extends far beyond its contribution to the global market, it is the lifeblood of the Ivorian economy.
Ghana is the second largest cocoa producer in the world, contributing around a fifth of the world’s cocoa every season, the OPEC fund for International Development details. Together, Ghana and the Ivory Coast account for around 60% of global supply.
Ivory Coast specifically accounts for 45 percent of the global production of the “brown gold”.
Major manufacturers such as Nestlé, Mars, and Hershey rely heavily on the country’s exports, making it an indispensable part of their supply chains. From farmers to industrialists, including politicians and service providers, cocoa is a crucial component of all Ivorians' lives, just as it has been for their ancestors for more than a hundred years.
We trace the history of cocoa cultivation on the fertile lands of Ivory Coast, examining colonial influences, early challenges, and their impact on the country's history of production. We will also examine global significance and analyze the development of the Ivorian cocoa production over the years.
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The Global Significance
Ivory Coast holds a dominant place in the global cocoa market, a position that has been maintained for more than forty years. The country is responsible for supplying around 40% of the world's cocoa. Despite the significant challenges faced in recent years, the West African nation remains the largest exporter to major chocolate manufacturers worldwide, including industry giants such as Nestlé, Mars, and Hershey.
This also means that any event in Ivory Coast will strongly impact all the cocoa and chocolate markets worldwide. A clear example of this could be seen recently in the 2023-2024 supply shock that happened in Ivory Coast and Ghana, that led cocoa prices to rise above $12,000/MT records.
Tantamount to its importance in the global market, Ivorian cocoa plays a major role on the country’s economy, contributing about 15% to the national GDP and employing for over 5 million people, spanning direct and indirect roles in many different sectors.
Cocoa History in Ivory Coast
The history of cocoa production in Ivory Coast traces back to the French colonization in the late 1800s. After establishing a protectorate over the coastal areas and gradually expanding their control inland, Ivory Coast officially became a French colony in 1893, and the colonial administration began exploiting its natural resources, including timber, rubber, and palm oil.
Cocoa was first planted in Ivory Coast in 1895 by French agronomist Louis Tautain, who brought seeds from the island of Fernando Po (now Bioko) in Equatorial Guinea. Tautain set up a cocoa plantation near Grand-Bassam on the coast, experimented with various varieties and cultivation methods, and distributed seeds to local farmers who quickly adopted cocoa as a profitable alternative to traditional food crops.
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Ivory Coast's tropical climate, characterized by wet and dry seasons, proved to be ideal for cocoa growth. The wet season, lasting from April to October, brings high rainfall (between 1500-2000 mm annually), which is essential for plant development. The dry season, from November to March, helps reduce the moisture content, providing optimal conditions for harvesting, fermenting, and drying the beans.
Despite the initial efforts, early cocoa cultivation faced many challenges, including adapting to local conditions, soil suitability, pest management, and especially resistance from local farmers, who were skeptical about the plant. To incentivize and support cocoa production, the colonial administration provided incentives and infrastructure, including tax exemptions, credit facilities, roads, railways, and ports.
They also recruited migrant workers from neighboring countries like Burkina Faso, Mali, and Ghana to supply cheap labor for the plantations, and adopted a forced-labor system to guarantee workers in the farms. Such measures bore fruit, and cocoa cultivation expanded from the center of the country to the less colonized areas of the West.
By 1911, Ivory Coast had become the fourth-largest cocoa producer in the world, following Ghana, Nigeria, and Brazil. By 1939, it had surpassed Brazil and Nigeria, becoming second only to Ghana.
Cocoa became the colony's main export commodity and revenue source, accounting for about 60% of total exports by the end of the colonial period.
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Ivory Coast’s cocoa industry later benefited from improved labor force and laws post WW2. Immigrants came to Ivory Coast due to better life conditions and payment compared to neighboring countries. With the scarcity of work and the reforms of the post-war period, most forced labor laws were abolished in 1946. Together, these two led to a new boom in cocoa production in the 1950s, which further consolidated Ivory Coast's position as a major cocoa producer.
To manage the internal cocoa market and stabilize prices, Ivory Coast founded in 1955 the Caisse de Stabilisation des Prix des Produits Agricoles (Caistab).
Ivory Coast's independence also boosted its local cocoa industry. Influential figures leveraged the cocoa boom and their political power to advance the cocoa sector, among them Félix Houphouët-Boigny, a descendant of chiefs of a cocoa farming tribe.
Using his positions and education, Houphouët soon became one of Ivory Coast's richest farmers, using his influence to create the African Agricultural Union (Syndicat agricole africain, SAA), intended to represent the interests of native farmers against those of French citizens in Ivory Coast.
After the success of the SAA, Houphouët was able to lead a successful political career in the French Parliament, increasing his popularity among Ivorians as a defender of African farmers in France. His success ultimately led to his election as the first president in 1959.
Post-independence, Houphouët instituted a one-party system and assumed the government of Ivory Coast, where he remained for 33 years. His policies in the 1960s and 1970s were effective in boosting cocoa cultivation. Among them were included subsidies, extension services, and higher prices paid to farmers.
The measures (as well as Houphouët connections from his political career in France) attracted international partnerships with global chocolate companies and organizations. Additionally, a new influx of immigrants arrived, lured by the promises of higher wages and better living conditions. Together, these factors significantly boosted Ivory Coast’s economy, making it French West Africa's most prosperous nation.
With independence, Ivory Coast's cocoa production expanded rapidly, eventually surpassing Ghana in 1978 to become the world's leading cocoa producer. These advantages allowed Ivory Coast to increase its productivity at a faster rate than its competitors.
Additionally, better cocoa prices offered by Ivory Coast attracted smuggling from Ghana, while laborers from neighboring countries moved there in search of higher wages and better living conditions.
In more recent years, both countries have developed a closer relationship in an effort to improve their profits in the cocoa market, which we will examine in more detail in the second part of this article.
After two decades of growth, Ivory Coast’s economy entered a severe crisis which would later negatively impact cocoa production. In the 1980s, cocoa prices plummeted, falling from $5,500 per metric ton in 1977 to $1,800 per metric ton in 1982.
The country’s reliance on cocoa took its toll, with most other sectors unable to compensate for the lost income, and some even suffering similar crashes, as was the case with coffee, whose price also fell sharply during this period. Although the Caistab acted to buffer the impact on farmers, it was not nearly enough to avoid the economic downturn.
To try to reverse the situation, the government increased its intervention in the cocoa market, attempting to artificially raise global prices and negotiate agreements with European cocoa traders and industrialists. When these attempts failed, Ivory Coast entered a financial crisis.
The reduction in exports, economic activity, and malinvestments led to a spike in foreign debt, which reached $10 billion by May 1987, prompting the government to suspend payments.
Soon after, in a desperate attempt to increase global cocoa prices, Ivory Coast suspended its exports in July. However, the attempted supply constraint failed, and in 1989 the country was forced to sell its stocks at a lower price.
The next decade was marked by economic stagnation and an intensification of ethnic conflicts, many of which were caused by disputes over cocoa farming lands. Together, these factors eventually led to civil war and the decline of cocoa productivity in Ivory Coast.
Challenges and Market Dynamics
Despite its dominance, the cocoa sector in Ivory Coast faces numerous challenges, including deforestation, climate change, and socio-economic issues such as child labor and income inequality. These factors not only threaten the sustainability of cocoa production but also impact global cocoa prices and the livelihoods of farmers.
In the past decade, the conversion of tropical moist forests into cocoa plantations has fueled deep problems. To accommodate this demand, cocoa farmers usually clear tropical forests to plant new cocoa trees rather than reusing the same land. That practice has spurred massive deforestation in West Africa, particularly in Ivory Coast. Experts estimate that 70% of the country’s illegal deforestation is related to cocoa farming.
According to Trase, Ivory Coast has lost 45 percent of its total tropical moist forest in the past 2 decades. To put it into perspective, Ivory Coast annually loses forests the area size of New York City.
The aftermath of deforestation has also had devastating consequences on biodiversity. Ivory Coast, a country once named for the abundance of elephants that roamed its lands, now only has a few hundred elephants that survived the widespread destruction of their natural habitat.
These environmental challenges are only compounded by additional socio-economic issues such as child labor in cocoa harvesting and stark income inequalities. Most West African cocoa farmers already make less than a dollar a day - and many female cocoa farmers make only around 30 cents a day - because the price of cocoa has fallen so low. This sinks them into grinding poverty that makes farmers unable to afford farm improvements. Child labor remains prevalent in cocoa-producing countries, where families often depend on their children’s work to offset high labor costs.
This is a complex global value chain marked by high price volatility and growing climate vulnerabilities.
Cacao - the plant whose pods are harvested into cocoa, eventually becoming chocolate - is an intricate agricultural product that is particularly vulnerable to its natural environment.
“I love cacao. It’s what I know best. But it’s very difficult to work with,” Akoua explains. “It gets contaminated by pests. It needs a perfect balance between rainfall and heat to thrive, otherwise, its roots get flooded and rot or they simply dry up. This means that we get fewer pods and fewer pods means fewer cacao beans.”
The top cacao producers in the world - Ivory Coast followed by its neighbour, Ghana - have been severely affected by the El Nino weather pattern. The climate phenomenon, characterised by warmer than average sea surface temperatures in the equatorial Pacific Ocean, has been bringing drier conditions to the West Africa region. Additionally, climate change-induced hotter temperatures and altered rainfall patterns have further affected cocoa harvests.
A few seasons ago, one hectare [2.5 acres] would yield about 600 kilos of cacao. Nowadays, it barely produces 300 kilos,” Akoua says.
Efforts for Sustainability
Ivory Coast and Ghana are taking active steps to stop deforestation and promote biodiversity, ensuring healthier ecosystems and reducing the need for forest clearance. Through its SCALA programme, UNDP focuses on sustainable agroforestry landscapes. Traceability is key to sustainable cocoa production. UNDP is working with Ivory Coast and Ghana to improve cocoa traceability systems, ensuring that cocoa products are sourced from deforestation-free areas. This effort is crucial for complying with international regulations and promoting ethical cocoa sourcing.
The government recently raised the price for a kilogramme of cacao, it’s a good step. But more needs to be done to help us and our livelihoods,” he adds. On April 2, Ivory Coast unveiled the new price for the mid-crop season spanning from April to September 2024. The price per kilogramme of cocoa beans is now set at 1500 CFA francs ($2.48), marking a 50 percent increase.
In 2021, Ivory Coast and Ghana introduced a premium of $400 per tonne known as the “decent income differential”. The purpose was to guarantee farmers a minimum income irrespective of fluctuations in the price of exported cocoa beans. The adoption of a stabilisation system effectively means that producers earn a set income per kilogramme sold, despite all of these external factors.
Cocoa Prices and Global Demand
Cocoa prices have been under pressure over the past seven weeks amid fears that high cocoa prices and tariffs could dampen chocolate demand. Chocolate maker Lindt & Sprüngli AG lowered its margin guidance for the year in July due to a larger-than-expected decline in first-half chocolate sales. Additionally, chocolate maker Barry Callebaut AG reduced its sales volume guidance for a second time in three months in July, citing persistently high cocoa prices. The company projects a decline in full-year sales volume and reported a -9.5% drop in its sales volume for the March-May period, the biggest quarterly decline in a decade.
Weakness in global cocoa demand has been a bearish factor for cocoa prices. The European Cocoa Association reported on July 17 that Q2 European cocoa grindings fell by -7.2% y/y to 331,762 MT, a bigger decline than expectations of -5% y/y. Also, the Cocoa Association of Asia reported that Q2 Asian cocoa grindings fell -16.3% y/y to 176,644 MT, the smallest amount for a Q2 in 8 years. North American Q2 cocoa grindings fell -2.8% y/y to 101,865 MT, which was a smaller decline than the declines seen in Asia and Europe.
Cocoa prices have been undercut by fears that high cocoa prices and tariffs could dampen chocolate demand. North American sales volume of chocolate candy was down more than -21% in the 13 weeks ending September 7, compared to the same period last year, according to data from research firm Circana.
Weak global cocoa demand is bearish for prices. Last Thursday, the CEO of chocolate-maker Hershey said chocolate sales this Halloween season were "disappointing." Halloween made up nearly 18% of annual US candy sales in 2024, second only to Christmas. Meanwhile, the Cocoa Association of Asia on October 17 reported that Q3 Asia cocoa grindings fell by -17% y/y to 183,413, the smallest grindings for a Q3 in 9 years. The European Cocoa Association on October 16 reported that Q3 European cocoa grindings fell -4.8% y/y to 337,353 MT, the lowest for a third quarter in 10 years. The National Confectioners Association reported that Q3 North American cocoa grindings rose +3.2% y/y to 112,784 MT, but the addition of new reporting companies skewed the data.
Cocoa has some support from a slowdown in the pace of cocoa exports from the Ivory Coast, the world's largest cocoa producer. Quality concerns regarding the Ivory Coast's mid-crop cocoa are supportive of prices. According to Rabobank, the poor quality of the Ivory Coast's mid-crop is partly attributed to late-arriving rain in the region, which limited crop growth. The mid-crop is the smaller of the two annual cocoa harvests, which typically starts in April and ends in September. The average estimate for this year's Ivory Coast mid-crop is 400,000 MT, down -9% from last year's 440,000 MT.
Another supportive factor for cocoa is the smaller cocoa production in Nigeria, the world's fifth-largest cocoa producer. Nigeria's Cocoa Association projects Nigeria's 2025/26 cocoa production will fall -11% y/y to 305,000 MT from a projected 344,000 MT for the 2024/25 crop year. In related news, Nigeria reported that its July cocoa exports fell -22% y/y to 13,579 MT.
Market Overview and Forecasts
December ICE NY cocoa (CCZ25) today is down -190 (-2.85%), and December ICE London cocoa #7 (CAZ25) is down -173 (-3.69%). This week's plunge in cocoa prices continues today, with NY cocoa posting a 19-month nearest-futures low and London cocoa posting a 20-month low. The outlook for abundant global cocoa supplies is hammering cocoa prices. Cocoa deliveries in Ghana, the world's second-largest cocoa producer, have surged and are weighing on prices. Cocoa arrivals to ports in Ghana in the four weeks ending September 4 reached 50,440 MT compared to about 11,000 MT delivered in the same period in 2024.
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