Brazil Cocoa Expansion Stalls as Prices Crash 70%

When the Brazil Cocoa Boom Met Reality

The math was irresistible eighteen months ago. Global cocoa prices had quadrupled from their $2,500 average to over $11,000 per tonne as disease, bad weather, and illegal mining devastated production in Ghana and Ivory Coast — which together supply nearly half the world’s cocoa. Investors, agribusiness giants, and Brazilian farmers rushed to fill the gap, envisioning a new Brazil cocoa chapter for a country that had lost 70% of its Bahia production to witches’ broom disease in the 1990s. This time, the expansion would be different: irrigated, mechanized, industrial-scale plantations in northeastern Brazil using drip systems that could push yields above 2,000 kg per hectare — nearly four times the West African average. This is part of The Rio Times’ comprehensive coverage of Latin American financial markets and economic developments.

Then prices collapsed. African production recovered, consumers cut back on expensive chocolate, weight-loss drugs like Ozempic dampened demand further, and manufacturers accelerated their shift toward non-cocoa ingredients — including artificially flavored palm oil butter. By early 2026, New York futures had fallen below $4,000 for the first time since November 2023, and by March they sat near $3,000. The ICCO now projects global surpluses of 287,000 tonnes in 2025/26 and 267,000 tonnes in 2026/27 — a dramatic reversal from the 400,000-tonne deficit that had triggered the price spike.

The Brazil Cocoa Projects That May Never Happen

Supply chain firm Czarnikow estimated that the planned Brazilian expansion would have added at least 75,000 hectares of irrigated cocoa, capable of producing 225,000 tonnes within four years — enough to supply 4.5% of global demand. Moises Schmidt, one of the largest cocoa farmers in the northeast, told Reuters that if prices remain below $5,000 per tonne, more than half the projects are dead. Schmidt himself had planned to scale up to 10,000 hectares — roughly the size of Manhattan. Swiss firm NewAg Partners has reportedly suspended a 8,900-hectare project, and Copa Investimentos, a São Paulo asset manager, is reconsidering its own industrial farm plans.

Paulo Torres, a London-based cocoa industry consultant who also farms in Bahia, captured the mood: he has abandoned plans for an additional 30 hectares because current prices cover neither investment costs nor operating expenses. The pattern is consistent across the sector — Netafim’s sales director Emerson Silva noted that a farm that planned 400–500 hectares is now planting 80–100 just to learn the crop, while the Cooabriel cooperative’s partnership with Cargill will continue only as a small-scale initiative.

Why This Matters Beyond Chocolate

The Brazilian retreat has consequences for the entire global cocoa supply chain. The expansion was supposed to reduce the world’s dangerous dependence on West Africa, where structural vulnerabilities — aging trees, cocoa swollen shoot virus in Ghana, and deforestation pressures amplified by the EU’s upcoming deforestation regulation — remain unresolved. Without the Brazilian buffer, any future production shock in Africa will once again send prices spiraling. Brazil’s own processing industry is already suffering: the country has capacity to grind 275,000 tonnes annually but processed only 190,000 in 2025, the worst result since the pandemic, as high input costs and weak global demand squeezed margins.

Not everything has stopped. São Paulo state government reforestation projects using cocoa trees on degraded farmland will proceed, and some seedlings are already prepared for planting. The Cooabriel-Cargill initiative continues on a reduced scale. Analysts expect Brazilian cocoa production to grow — but slowly, through diversified agroforestry rather than the industrial monoculture that investors had envisioned. The episode illustrates a recurring pattern in commodity markets: the same price signal that creates the incentive for expansion also sows the seeds of its own reversal. By the time new trees could have borne fruit in four years, the market that justified planting them had already ceased to exist.