In March, prices rocketed to more than $10,000 a tonne in New York after a poor harvest in West Africa due to a combination of bad weather conditions and disease devastating ageing plantations.
They have since fallen back from the peak, yet are still three times higher than last year.
In Ivory Coast and Ghana, the world’s largest cocoa producers, prices are set by the authorities in October on the basis of the previous months.
But by that point the harvests “have already been largely pre-sold”, said Tancrede Voituriez of the French agricultural research and cooperation organisation CIRAD.
This reduces the impact of cocoa price fluctuations — whether upwards and downwards.
As a result, small-scale producers, who generally earn barely enough to live on, did not immediately benefit from the surge.
That said, the authorities raised the price of the intermediate crop in April by 50 percent to between $2,300 and $2,500 per tonne — a modest rise compared to what the farmers could charge on the international exchanges.
In countries with less regulated systems, such as Cameroon, Nigeria, Ecuador and Brazil, growers managed to pocket more from the trend.
There, farmers have been allowed to sell their beans to buyers willing to approach the prices paid on the financial markets.
But that deregulated approach comes with risks of its own.
“Soaring prices have made production more attractive,” David Gonzales, coordinator of the Peruvian Chamber of Coffee and Cocoa, told AFP.
The fear is that there will be an excess of cocoa in three to five years’ time — the time needed for farmers hoping to cash in to grow new trees — causing prices to tumble back to earth.
The major processors who grind the beans into butter, liquor or powder — notably Switzerland’s Barry Callebaut, America’s Cargill, Singapore’s Olam — generally negotiate a large part of their supplies in advance.
But some contracts have not been honoured, forcing them to scour for urgently needed cocoa at high cost and in some cases to slow down production.
Barry Callebaut reported in early April that it had drawn more than usual from its cash reserves to finance bean purchases, but had enough cocoa on hand to meet demand.
Other smaller intermediaries may find it difficult to advance the funds needed to adapt to the higher prices.
Yet there is one group of middlemen who would have been delighted at the price rises.
“The smugglers would have done very nicely there,” Steve Wateridge of commodity firm Tropical Research Services told AFP.
He said black marketeers could have taken advantage of the system in Ivory Coast and Ghana by buying cocoa at slightly above the fixed prices and selling the beans on the open market in Togo, Guinea, Liberia or Sierra Leone.
