Why the price of your coffee and chocolate has not come down

In a single season Côte d’Ivoire and Ghana lost 772,000 tonnes of cocoa between them. Côte d’Ivoire’s crop fell by a quarter, from 2.24 million tonnes in 2022/23 to 1.67 million in 2023/24 (Fig. 2; ICCO, 2025b). Ghana’s fell by almost a third, from 654,000 tonnes to 449,000. That season the world ran a cocoa deficit of 492,000 tonnes (ICCO, 2026a). The ICCO put the ratio of stocks to a year’s grindings, the beans processed into cocoa, at its lowest in 45 years (ICCO, 2024c).

The weather that did it carries a measured climate signal. Heavy rain in May and June 2023 flooded Ivorian farms and spread brown rot, cutting yields by 21% to 25% (USDA FAS, 2025a). The humid heat of February 2024 over coastal West Africa was about 4°C hotter, and at least 10 times more likely, because of human-caused warming (World Weather Attribution, 2024). Climate Central (2025) counts about 40 extra days a year above 32°C in the cocoa regions of Côte d’Ivoire and Ghana from 2015 to 2024.

Disease and old trees made the loss slow to reverse. Cacao swollen shoot virus had a prevalence above 30% in Ghana by the third national survey, in 2023, and about a fifth of Ivorian trees are more than 30 years old (Ameyaw et al., 2023; Daymond et al., 2021). The ICCO judged Ghana’s decline structural from 2016/17, citing the virus, illegal mining, ageing trees and weather (ICCO, 2024a). A shortfall that cannot be grown back within a season has to be rationed by price, which pushed the bean up.

Brazil grows 37% of the world’s coffee, and by the USDA’s count its arabica underperformed for five years from 2021/22 to 2025/26 (Climate Central, 2026; USDA FAS, 2026a). Drought and heat cut the 2021/22 crop, frosts in June and July 2021 hurt the next one, and in 2024 the main coffee state, Minas Gerais, went nearly 200 days without rain (USDA FAS, 2021; USDA FAS, 2025b; USDA FAS, 2026a). February 2025 brought more heat during the months the beans fill (USDA FAS, 2025c).

The world covered the gap from its stockpiles. By the USDA’s count, the coffee left in store at the end of each season fell by more than two-fifths, from 37.5 million 60-kilogram bags in 2020/21 to 22.0 million in 2024/25 (Fig. 3; USDA FAS, 2026b). Vietnam, the second-largest grower, lost robusta to heat and drought in 2023 and 2024, weather the USDA expected to become more frequent with climate change (Climate Central, 2026; USDA FAS, 2024).

The heat itself is now counted. From 2021 to 2025 climate change added about 70 days a year above 30°C, the level that harms arabica, in Brazil and 67 in Minas Gerais (Climate Central, 2026). The record is regional rather than event by event: the one attribution study of an earlier drought in southeast Brazil, in 2014 and 2015, found climate change was not its main driver (World Weather Attribution, 2015). The longer trend points the other way, with a study of cave records finding today’s dryness in central-eastern Brazil unmatched in 720 years and mostly human-caused (Stríkis et al., 2024).

As the price spiked, holding a position in cocoa futures took far more cash. ICE, the exchange where New York cocoa futures trade, sets the initial margin, the cash a trader must post for each contract. On the May 2024 contract it raised that margin sixfold, from $1,870 on February 5, 2024 to $11,260 on April 18 (ICE Futures U.S., 2024a; ICE Futures U.S., 2024c). Traders left: open interest, the number of contracts held open, fell by more than half between January 23 and April 23, 2024, from 333,669 contracts to 152,895 (Fig. 4).

A thinner market moves further on each piece of news. The ICCO put the annualised volatility of the second ICE contract at 18.73% in April 2024, almost five times the 3.95% of October 2023, and the margin calls that followed pushed more traders out (ICCO, 2024b). The New York price set what was then a record, $11,878 a tonne, on April 19, 2024, and ended the year almost as high, at $11,545 (ICCO, 2024b; ICCO, 2025a). By mid-December open interest was down to 127,978 contracts, under two-fifths of its January level.

That amplifier has now turned. Fund managers held a net 82,572 contracts betting on higher cocoa prices in January 2024; on September 29, 2026 they held a net 16,022 betting on lower ones. In coffee their net bet on higher prices has shrunk by more than three-quarters, from 72,818 contracts in April 2024 to 16,206. A market half its former size carried the 2024 spike, and its speculators now bet the other way.

The harvests turned first. Cocoa moved from deficit to a surplus of 37,000 tonnes in 2024/25 on the ICCO’s count, as production rose 8.5% and grindings fell 3.3% (ICCO, 2026b). The USDA forecasts a record coffee crop of 189.7 million bags for 2026/27, 71.9 million of them from Brazil (USDA FAS, 2026a). The ICO’s composite coffee price, an average across the main types of coffee, was $2.62 a pound in September 2026, a fifth below its November 2025 level (ICO, 2026b).

Growing countries have passed the fall on to farmers. Côte d’Ivoire cut its fixed farm price for the 2026/27 main crop by more than half, to 1,200 CFA francs a kilogram from 2,800 a year earlier (Agence Ivoirienne de Presse, 2025; Gouvernement de Côte d’Ivoire, 2026). Ghana’s price of 42,400 cedis a tonne is more than a quarter below the 58,000 it set in October 2025 (COCOBOD, 2025; COCOBOD, 2026).

Even after the fall, the beans cost more than twice what they did in 2019. In July 2026 cocoa sold for $5,619 a tonne and arabica for $3.59 a pound, each 2.3 times its December 2019 price. After general inflation both are still about 77% dearer (Fig. 5).

Shop prices rose much less. Since 2019 US coffee prices in the shops have risen 58% and euro-area chocolate 54%, about twice as fast as prices in general. Taking out that general inflation, 30% in the United States and 27% in the euro area, leaves both shop prices about a fifth above their 2019 level. A shop price that kept pace with general inflation and passed on about a quarter of a bean price that more than doubled would sit about where these do.

Coffee in the shops peaked within half a year of the bean. US coffee prices peaked in May 2026, six months after arabica, and euro-area coffee in February 2026, after three (Fig. 6). Chocolate took a year and a half: US candy prices peaked in June 2026, 17 months after cocoa, and euro-area chocolate in July 2026, after 18.

The same delays hold across the decade. From 2018 to 2026 a move in arabica reached US coffee prices about eight months later, and each 10% move in the bean carried about 2.4% into the shop price. Euro-area chocolate follows cocoa after 13 months, at about 1.1% for each 10%. A US government study found the same order of size, about 3% at retail for a lasting 10% move in green coffee (Leibtag et al., 2007).

That rule explains US coffee prices since 2019 almost exactly. Passing on the bean’s rise at that rate, on top of general inflation, gives a 59.1% rise in US coffee prices, and the index rose 57.6%. Chocolate breaks the rule. By the same rule, cocoa’s fall to July 2026 should have cut euro-area chocolate prices by 2.1%, even after adding back the euro area’s 4.9% inflation over those months. They rose 13.5% instead.

Chocolate makers lock in the price of their cocoa months in advance, so today’s shop prices still carry cocoa bought near the peak. Mondelez said in July 2026 that its “existing hedge positions continue to reflect previously contracted prices” (Mondelez International, 2026). Hershey reported that cocoa futures averaged $1.80 a pound in the first half of 2026, less than half their 2025 average. Over the same months Hershey raised prices by about 12 points and lost about 8 points of volume, and its adjusted gross margin widened by 3.5 points, to 41.6% (The Hershey Company, 2026a; The Hershey Company, 2026b). Lindt raised prices 11.8% and lost 7.5% of volume, then cut its 2026 sales guidance on September 29 (Lindt & Sprüngli, 2026a; Lindt & Sprüngli, 2026b). Nestlé expects lower coffee and cocoa costs to lift its margins in the second half (Nestlé, 2026a).

For a cup of coffee the sums are small. The beans in a 12-ounce cup cost about 8 cents in December 2019, 21 cents at arabica’s peak in November 2025 and 18 cents in July 2026. The lag and the hedges hold the shelf up for now, and so far it has passed on little of the beans’ fall.

From August 6 to November 12, 2025, Brazilian green coffee paid an extra 50% at the US border, a 40% tariff with a 10% reciprocal one on top (Executive Office of the President, 2025a; Executive Office of the President, 2025b). Under the same orders, coffee and cocoa from Vietnam, Indonesia, Côte d’Ivoire and Ghana paid reciprocal tariffs of 15% to 20%. Two orders exempted coffee and cocoa from November 13, 2025 (Executive Office of the President, 2025c; Executive Office of the President, 2025d). On February 20, 2026 the Supreme Court ruled that the emergency-powers law “does not authorize the President to impose tariffs” (Supreme Court of the United States, 2026). Beans and cocoa products now pay no extra US duty. Chocolate still pays the Section 301 tariffs: 25% on chocolate from Brazil since July 22, 2026, and 10% to 12.5% on chocolate from the 60 economies of the forced-labor action since July 24 (Executive Office of the President, 2026a; Executive Office of the President, 2026b).

Euro-area buyers got a stronger currency instead. The euro rose about 10% against the dollar between January 2025 and July 2026, from $1.036 to $1.142, and the beans fell further in euros than in dollars. Cocoa fell 52.4% in euros against 47.5% in dollars, and arabica fell 8.0% in euros while rising 1.5% in dollars.

Over the past year shop prices split the same way. In the year to August 2026 US coffee prices rose 6.1% and US candy 8.1%. In the euro area coffee fell 1.1% and chocolate rose only 1.3%. Prices in general rose at about the same pace on both sides, 3.4% in the United States and 3.2% in the euro area. After inflation, US coffee and candy still got dearer, while euro-area coffee and chocolate got cheaper (Fig. 7).

The tariff months and the weaker dollar both fall inside that year. The emergency tariffs are now being refunded, with interest, to the importers that paid them (US Customs and Border Protection, 2026). Starbucks said its refunds largely offset the tariffs of the first three quarters of its 2026 fiscal year (Starbucks, 2026a).

The strongest case for the claim looks forward, to the next harvests. On September 10, 2026 NOAA’s Climate Prediction Center gave a very strong El Niño from September through January a chance of more than 90%, and the strongest event since 1950 a chance of 75% (NOAA Climate Prediction Center, 2026). The ICCO has flagged the El Niño as a weather risk for cocoa, and the ICO says Brazil’s flowering in September and October is critical for the 2027/28 arabica crop (ICCO, 2026b; ICO, 2026a).

The forecasts for the next cocoa crop have already turned down. Ghana’s cocoa board said in July that its 2026/27 crop would fall by at least 16% (Reuters, 2026a). In September its marketing arm put the crop at 470,000 to 620,000 tonnes, against about 760,000 a year earlier (Reuters, 2026b). StoneX cut its forecast of the 2026/27 world cocoa surplus from 267,000 tonnes to 149,000 in April, then to 25,000 in July (Asplund, 2026; StoneX, 2026). Coffee stocks are thin too. The coffee certified for delivery on ICE, graded and stored ready to settle futures contracts, fell to 217,646 bags on September 15, below the August 31 level the ICO called the lowest since 1999 (ICO, 2026a; ICE Futures U.S., 2026). By October 2 it had recovered to 260,239 bags.

The long-run science points the same way, since it projects less land fit for both crops. Bunn et al. (2015) project that climate change halves the land suitable for coffee by 2050, and Läderach et al. (2013) find parts of Côte d’Ivoire’s cocoa belt unsuitable by then. Kath et al. (2022) find coffee yields drop fast once the air during fruit development dries past a threshold that most growers cross with warming above 2°C.

Each of these is a reason for the bean price to stay well above its 2019 level, and each acts on harvests from 2027 on. None explains why shop prices stayed up through 2026 while cocoa nearly halved, which the lag, the hedges and the margins do. A strong El Niño that cut the West African main crop would raise the bean price before the shops had passed on its fall, and shoppers would see no decline at all.

The US Bureau of Labor Statistics publishes September prices on October 14 and October prices on November 10, 2026. Arabica’s peak is now 10 months past, beyond the usual eight-month delay, so a US coffee index back at its May high of 304.8 would mean the delay has stretched. A candy index above its June high of 230.0 would mean chocolate makers are holding on to their margins.

Nestlé reports its nine-month sales on October 22, Starbucks is due to report on October 29, and Hershey and Mondelez are expected in late October (Nestlé, 2026b; Starbucks, 2026b). Their price and volume figures will show whether the cheaper beans are reaching the shelf.

The ICCO’s November bulletin, due in late November going by last year’s November 28 release, may restore the 2025/26 cocoa balance it withheld in August (ICCO, 2026b). The USDA’s coffee report of December 16, 2026 updates the record Brazilian forecast (USDA FAS, 2026a). The EU deforestation rule applies to large and medium operators from December 30, 2026. It requires every lot of cocoa and coffee sold in the EU to be traced to land not cleared after 2020 (European Union, 2023; European Union, 2025).

NOAA’s next El Niño discussion is due on October 8, 2026 (NOAA Climate Prediction Center, 2026). Fund managers’ net short position in cocoa, 16,022 contracts on September 29, is the market’s own reading: a swing back to a net long would mean the futures market again expects a shortage.