Readers who have been with us for a while have seen us quote one of the more evocative sentences you are likely to find on markets:
“…For, after all, I had been into cocoa a bit myself. That was back when The Great Winfield had discovered cocoa trading. Occasionally in those more leisured days I would sit with him lazily watching stocks move, like two sheriffs in a rowboat watching catfish in the Tennessee River….”
— On the Trail of Cocoa: The Dark Goddess, April 3, 2021, more after the jump*
From ZeroHedge, February 27:
Cocoa prices have collapsed 75% from their 2024 peaks, and Goldman’s latest note points out that the worst of the cocoa shock for chocolate makers may finally be passing after being squeezed by soaring bean costs through 2023, 2024, and into the first half of 2025. This only suggests that lower chocolate bar prices at the supermarket could materialize later this year. Against that backdrop, Goldman reiterated Buy ratings on two confectionery stocks.
Analysts led by Sam Darbyshire said the global chocolate production costs should drop by as much as 10% in 2026 and 2027. She pointed out that weather patterns in West Africa - the mecca of global cocoa farming - have supported increased production for the upcoming harvest, leading to stabilization in global supplies.
Darbyshire pointed out that the cocoa futures curve is no longer backward-dated, with December 2027 delivery now 17% more expensive than March 2026 delivery. She said this would help top confectionery firms to commit to increased volumes.
"Double-digit raw material deflation in chocolate over the next two years is likely to drive an increasingly competitive operating environment as manufacturers strive to return to volume growth," she wrote in the report.
Darbyshire noted that, with elevated chocolate prices, current Nielsen data show that consumer demand for chocolate remained soft in January, with elasticities worsening in Europe (consistent with Mondelez commentary). She said that private players are being more competitive on pricing, with Mars and Ferrero pricing below market.
"With weak underlying volumes and easing raw material inflation, we expect promotional activity to intensify throughout the year," the analyst said.
Darbyshire said this new cocoa pricing regime has generated a "Buy" in Barry Callebaut and Nestle, but "Sell" in Lindt....
....MORE
*The 'Adam Smith' intro was last seen in October 2025's "Cocoa Price Selloff Accelerates as Global Supply Prospects Improve" which concluded with this outro:
....part of the chapter it comes from.
So: the funniest pages ever written on commodities investing, by the great "Adam Smith", in 1968: "The Cocoa Game", from "The Money Game". 1/2
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There's more, all great, but that should help to sate the cravings until the chocolate Easter bunnies arrive.
If interested here are the two tweets that Anne-Elisabeth posted:
