The outlook for cocoa beans offers unwelcome tidings for chocolate makers hoping prices are on the retreat.

After an explosive rally in the first four months of the year, prices have cooled somewhat. Having started the year at about $4,400 per tonne, cocoa beans futures prices peaked at $12,000 in April — well above the inflation-adjusted decade average of $3,400. Yet by May, prices plummeted to $7,000 a tonne. But the respite is likely to be temporary. The prospect of a multiyear structural supply-demand deficit in cocoa beans will mean much higher prices are coming.

This is likely to catch out many chocolate makers that have been betting at their peril on a more sustained fall in prices, draining their stockpiles while reducing price hedges from eight to nine months of demand to five months. The strong pod count recorded from May to August had raised hopes among the makers that a rebound in production would replenish inventories, especially following the 500,000-tonne deficit in the 2023-24 season — the third consecutive annual shortfall and largest ever. This shortfall is attributed to a 13 per cent drop in global cocoa output due to much weaker production in Ivory Coast and Ghana — responsible for more than half of the world’s production.