Swiss chocolate giant Barry Callebaut has warned that El Niño weather conditions could push cocoa bean prices higher while rising fuel costs linked to Middle East tensions may add further pressure to its operations, the company said Tuesday.
Chief executive Hein Schumacher said the climate phenomenon could lift cocoa prices by “a few thousand pounds per metric ton,” as adverse weather patterns threaten crop yields in key producing regions.
El Niño, a naturally occurring climate event linked to warming Pacific Ocean temperatures, typically disrupts rainfall patterns globally, increasing the risk of droughts in some regions and heavy rains in others.
For West Africa, which produces the bulk of the world’s cocoa, abnormal weather conditions can significantly affect harvests and tighten global supply.
Schumacher said the company was closely monitoring developments but noted that price increases were unlikely to reach the extreme levels seen in recent years, when cocoa markets experienced record volatility.
London cocoa futures were trading at £2,944 (US$3,964) per tonne, well below the peak of more than £9,000 reached in April 2024, reflecting some easing in market pressures.
The World Meteorological Organization has indicated an 80 percent probability that an El Niño event will develop between June and August, with a 90 percent chance it will persist into November.
Such conditions can have a direct impact on agricultural output, particularly for cocoa, which is highly sensitive to temperature and rainfall changes in major producing countries such as Ivory Coast and Ghana.
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Barry Callebaut, one of the world’s largest processors of cocoa beans, said it was also watching the impact of rising fuel costs, which have been influenced by geopolitical tensions in the Middle East.
Schumacher said fuel represents a key cost driver for the company, affecting both direct operational expenses and broader demand dynamics across its supply chain.
“(Fuel) has a direct impact on our operations and an indirect impact on demand and so forth, and that’s something that we need to look at to what extent we can offset that,” he said.
He added that the company would assess how much of the cost pressure could be absorbed or passed on to customers in coming months.
Energy prices have remained volatile amid ongoing geopolitical risks, with disruptions to global supply routes adding uncertainty to logistics and transportation costs for major manufacturers.
El Niño-related supply risks combined with elevated fuel costs could create a more complex operating environment for the global chocolate industry, which is already navigating fluctuating commodity prices and shifting consumer demand patterns.
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Analysts say cocoa processors are likely to remain exposed to both climate-related supply shocks and energy-driven cost inflation, making risk management increasingly important in the months ahead.
