Before the year 2023, dry cocoa beans cost 7000/= to 8000/= Uganda shillings per Kilogram and this was a normal range. The last three years of very high prices in over 50 years were a result of the follow ing: There was a massive supply deficit in West Africa due to extreme weather disruptions in lvory Coast and Ghana, given that the two countries produce around 60% of world’s cocoa. In addition, disease outbreaks like black pod and swollen shoot virus causing a major 400,000 tonne supply deficit. Also, the European Union deforestation regulations and restrictions have also affected supply patterns in short or midterm. Speculation in the financial markets when the supply of cocoa dried up also created a “cocoa crisis” and subsequently very high prices.There was a lso an issue of aging trees in West Africa and lack of investment that contributed to very low productivity, hence the hiking of prices.
The high demand for Ugandan cocoa was for its consistence and high quality coupled with world cocoa trends. The Ugandan climatic conditions were better than its peers meaning better harvests, value addition initiatives that also drove the prices high thus increasing incomes and Returns on Investments (ROI).
The current downward trend in dry cocoa bean prices is due to improved supply forecast in West Africa and significant demand destruction caused by high consumer prices.There is an estimated surplus of 180,000 to 300,000 metric tonnes in 2025/2026 cocoa season globally.The cocoa products demand went down especially in Asia and Europe up to negative 16% due to high prices of finished products like chocolates, powder etc.
There is also less speculation by financial investors that creates a shift from net long to net short positions. Additionally, an element of alternatives and product reformulation(shrinkflation) reduces the demand for cocoa.For fear of much lower prices, export sales have increased with a lot of pressure, piling up stocks, increasing inventory levels leading to downward pressure and low prices.As a result of high prices,manufacturers in Europe are using shrinkflation in production affecting the demand for cocoa negatively.
Considering the structural supply issues like aging trees and disease such as cocoa Swollen shoot virus and limit investment in West Africa; the likelihood of long dry seasons may lead to 8-10% drop in yields hence reversing the trend.
There is a stronger long-term demand for cocoa especially chocolate in emerging markets and premium segments which will support prices in the long run. Also other producing countries like Ecuador, Indonesia and others should be put in perspective because the likely shrink or otherwise will affect the global market.
The supply side for cocoa is recovering but structural issues are still there. A rebound of high prices may occur if the anticipated surplus does not materialize due to poor weather or if demand recovers sooner than expected.
Nevertheless,there is a competitive advantage for Uganda compared to other cocoa growing countries.Cocoa remains a lucrative crop in Uganda amidst the fragile fluctuating trends.
The very fertile soils,rainfall throughout the year in required ranges, good agricultural practices like weeding,pruning,mulching,use of organic manure and availability of water bodies for irrigation,we can increase productivity tenfold meaning even at low prices, incomes to the farmers would be more than double. In Uganda, a cocoa tree produces one kilogram to two kilograms per year and a few improved fields or farmers are producing five Kilograms per year and there is a possibility to go to ten if all is done well.
Uganda has high quality cocoa, organic by default, better bean count than anywhere in the world, and this will continue to increase demand for our cocoa.We need to manage our post-harvest well, reduce wastage, excellent fermentation, drying, sorting, and storage to benefit more.
Initiatives and interventions towards value addition should increase and be realized especially that our cocoa is of higher quality resuIting into better finished products. We already have few chocolate artisans which should continue and be supported.
The government should promote initiatives and partnerships to increase cocoa growing countrywide to spur production.A project like The Coffee and Cocoa Value Chains development (CoCoDev) is doing a lot in that area and thanks to the European Union our partners and Uganda government.The development of commercial farmers and the expertise gained will motivate others for the better of the cocoa sector.
As government, farmers and stakeholders, we need to lead the continuum and total stewardship for maximization of returns on cocoa investment.
The manufacturing side of the value chain, issues of branding and consumer patterns will mitigate and address this fragility of cocoa prices in Uganda and more confidence for farmers and stakeholders. So by focusing on sustainability, productivity and ethical practices we shall create a resilient supply chain that secures the future of cocoa while maximizing value for stakeholders.
Written by,
Maniraguha Emmanuel,Presidential Cocoa Medalist, cocoa expert, farmer, entrepreneur, Chairman Uganda cocoa Development Association, Managing Director True Cocoa (U) Limited, and a
stakeholder in many cocoa initiatives in East Africa.