Brazil’s Large-Scale Cocoa Farming Ambitions Slow After Price Collapse
Brazilian farmers and investors are scaling back ambitious plans to develop large industrial cocoa farms after global prices plunged from record highs reached in 2024.
The collapse in prices, which have fallen about 70% from last year’s peak, has weakened the economic case for major new planting projects that had been expected to transform Brazil into a significant global supplier of cocoa.
At current market levels of roughly $3,000 per metric ton, farmers and analysts say that about half of the large-scale projects planned across Brazil’s northeastern region may be cancelled.
The initiatives were expected to cover at least 75,000 hectares of cocoa plantations, according to estimates from supply chain services provider Cargill, potentially supplying close to 5% of global cocoa demand.
“If Brazil’s cocoa expansion plans were a heavy rainstorm, the price crash has been a cold shower,” said Paulo Torres, a cocoa adviser based in Bahia. Torres himself has already abandoned plans to plant an additional 38 hectares of cocoa.
With prices falling sharply, many farmers say revenues would not cover the investment and production costs required to establish new plantations.
Several of the large projects had attracted interest from major industry players including Cargill and Barry Callebaut, who saw Brazil as a potential alternative source of cocoa supply after years of production challenges in West Africa.
Ghana and Ivory Coast together account for roughly half of global cocoa production, but poor weather, crop disease and other disruptions in recent seasons reduced harvests in both countries during 2023 and 2024.
Those supply problems pushed cocoa prices from about $2,500 per ton to more than $11,000, triggering panic among chocolate manufacturers.
Cocoa traders began searching for alternative sources of supply. Smuggling also increased in West Africa as farmers attempted to bypass government price controls and sell beans across borders where prices were higher.
At the same time, chocolate companies raised retail prices to offset the surge in raw material costs.
However, the price increases led consumers to reduce purchases of expensive chocolate products. Some manufacturers also introduced smaller package sizes and substitutes such as vegetable fats, reducing cocoa demand and contributing to the recent price decline.
Production outside West Africa has also begun to recover. Countries such as Ecuador have expanded output, while African production is expected to rebound.
In Brazil, smaller cocoa farmers have struggled to benefit from the previous price spike. Earlier this year a group of growers blocked a road leading to the port of Ilheus in Bahia, burning tires to protest imports of African cocoa.
Brazil’s food supply agency Conab later suspended cocoa imports from Ivory Coast.
DELAYS AND REASSESSMENT
Moises Schmidt, one of the largest cocoa producers in Brazil’s northeast, said the current price level does not justify the investment needed for irrigation systems and processing equipment typical of large commercial farms in the region.
Schmidt previously announced plans to expand his plantations to 10,000 hectares (24,710 acres)—roughly the size of Manhattan. But he said that if cocoa prices remain below $5,000 per ton, more than half of the proposed projects could disappear.
Sources also said that a major project backed by Swiss investment firm NewAg Partners, which planned to develop up to 22,000 acres (8,900 hectares) of cocoa plantations, has been suspended.
“At this stage we prefer not to comment,” said Detlef Schoen, chief executive of NewAg.
Other initiatives remain under review. Copa Investments, a Sao Paulo–based asset manager focused on agriculture and forestry, had also been studying a large industrial cocoa project.
One of its partners, Apolonio Sales, said the company is still evaluating whether to proceed after visiting some of the new farms and speaking with cocoa traders and chocolate manufacturers.
SLOWER GROWTH AHEAD
Despite the setback, experts say Brazil’s cocoa sector is still likely to expand, although at a more gradual pace.
Instead of developing large monoculture plantations immediately, many farmers are expected to start with smaller plantings or integrate cocoa into diversified farming systems alongside other crops.
“If a large project originally planned 400 or 500 hectares, now it may start with just 80 or 100 hectares to learn about the crop first,” said Anderson Silva, sales executive at irrigation equipment company Netafim.
Brazilian agricultural cooperative Coopbrail, which launched a cocoa initiative with Cargill last year, said it plans to continue developing its pilot project.
Government-backed programs in Sao Paulo state that encourage cocoa cultivation as part of efforts to restore degraded farmland are also expected to move forward.
“In some areas we already have seedlings ready to go into the ground,” said a program coordinator. “But like any commodity market, cocoa prices move in cycles.”
Cocoa prices have fallen more than 70% since their peak in 2024, forcing Brazil’s large-scale expansion plans to slow dramatically, though industry participants say the long-term potential for cocoa farming in the country remains intact.
