Ambitious plans to transform Brazil into a major global cocoa supplier are losing momentum after a sharp drop in international cocoa prices, forcing farmers and investors to reconsider large-scale plantation projects across the country.
Over the past year, cocoa prices have plunged roughly 70% from their 2024 record highs. With beans currently trading near $3,000 per metric ton, many projects aimed at expanding industrial cocoa farming in Brazil are now considered financially unviable.
The projects were largely concentrated in Brazil’s northeast, particularly in Bahia, and had been expected to add roughly 75,000 hectares of new plantations. According to supply-chain services firm Czarnikow, that expansion could have produced enough cocoa to meet nearly 5% of global demand.
Instead, analysts and producers now say as many as half of those large-scale initiatives may be abandoned.
Paulo Torres, a cocoa farmer and industry adviser based in Bahia, said current market conditions make new investments difficult to justify. He recently canceled plans to expand his own cocoa fields by about 30 hectares, explaining that prices no longer cover the cost of establishing and maintaining new plantations.
The expansion had attracted major industry support from companies including Cargill and Barry Callebaut, which viewed Brazil as a potential alternative supply source to West Africa.
Currently, about half of the world’s cocoa is produced in Ghana and Ivory Coast. Heavy reliance on those countries has made the global chocolate supply vulnerable to weather problems, disease outbreaks and illegal mining that can disrupt farming.
Production setbacks in West Africa during 2023 and 2024 triggered a dramatic surge in cocoa prices, which briefly climbed from about $2,500 per ton to more than $11,000. The spike fueled optimism that Brazil could rapidly scale up industrial farming operations.
However, the global market has shifted again. Production in Africa has begun recovering, while other producers such as Ecuador have increased output. At the same time, higher chocolate prices have reduced consumer demand.
Chocolate makers have raised prices to offset previous supply shortages, and some have turned to smaller packaging sizes or alternative ingredients to manage costs. Analysts also point to shifting consumer behavior and the growing use of weight-loss drugs as factors reducing chocolate consumption.
In Brazil, the price crash has already sparked protests among smaller farmers. Last month, a group of producers blocked a road leading to the port of Ilhéus in Bahia, setting tires on fire in protest against imports of cocoa beans from Africa. Shortly afterward, Brazil’s food supply agency Conab suspended imports of cocoa from Ivory Coast.
Large-scale farming ventures are now reassessing their strategies. Moises Schmidt, one of the region’s biggest cocoa growers, had previously envisioned plantations covering up to 10,000 hectares. He said the current price environment cannot support the heavy investments required for irrigation, machinery and processing infrastructure.
Other projects have also slowed. Sources familiar with the sector said a major plantation plan backed by the Switzerland-based investment firm NewAg Partners has been suspended, while asset manager Copa Investimentos is still evaluating whether to proceed with its own cocoa initiative.
Industry experts say cocoa production in Brazil may still grow in the coming years, but at a much slower pace. Instead of massive monoculture farms, expansion is likely to occur gradually as farmers integrate cocoa trees alongside other crops as a diversification strategy.
Despite the current downturn, some producers remain optimistic that prices could recover over time, potentially reviving interest in larger cocoa projects in the future.