Short overview:
At first glance, cacao prices seem like a simple topic: there is one price, and it rises or falls. In reality, it is much more complex. What happens on the exchange often has only an indirect relationship to how cacao farmers are really doing. While prices fluctuate, many producers are also struggling with rising living costs, uncertain harvests and a system in which only part of the money actually reaches them. This text tries to separate these things and explain what is really happening in the cacao market right now.
Thoughts after a 16-minute voice memo from Jan Schubert about cacao prices, market logic and the years 2026/27
In recent weeks, the question kept coming up: what does the escalation around Iran actually mean for cacao? At first, the logic seems obvious. If geopolitical tensions rise, energy becomes more expensive, transport becomes less secure and markets behave nervously, this should eventually be felt in cacao too.
A few days ago, Jan Schubert sent me a 16-minute voice message from Cuenca in Ecuador about exactly this. Jan is Head of Sourcing at Original Beans and one of our direct trading partners. He lives close to the origins, travels a lot, speaks with cooperatives, exporters, agronomists and producers, and therefore often has a view of the market that differs significantly from what you would read from headlines or price charts.
What I found so helpful about the message was that it was neither alarmist nor dismissive. Above all, it helped separate different things that are often mixed together in public debate. That is exactly what I am trying to do in this text.
The first point: the world market price tells only part of the story
Right at the beginning, Jan says a sentence that sets the direction for me:
"The world market price for cacao is still insanely low."
At first, that sounds almost counterintuitive, because the cacao price has been in the media spotlight more strongly than it has been for a long time. But this is where the first misunderstanding begins. When we talk about "the cacao price," we often mean very different things: the exchange or world market price, prices along the supply chain such as the so-called FOB price, or the farmgate price, meaning what actually reaches the farmer. On top of that come differences in quality, regional differences and very different cost structures.
In his voice memo, Jan first talks about the world market price, meaning what is visible on futures markets, for example in London. His observation is that this price has repeatedly reacted to news recently, but without a clear direction. One moment there is news that the Strait of Hormuz might be closed and the market moves up slightly; then news of a supposed deal between the United States and Iran comes in and it falls again.
That is not a contradiction, but an expression of how this market is currently functioning. The futures market trades not only current scarcity, but above all expectations. And right now, two things overlap there: a still fragile supply situation and weaker demand than expected.
Why the price does not simply rise despite fragile harvests
A central part of Jan's assessment is the demand side. He says that demand in the first quarter in America and Europe was significantly worse than forecast, and also worse than last year. The so-called grinding figures, meaning how much cacao is processed, from Europe and North America are important signals for the market because they are read as an indicator of industrial demand.
When these numbers are weaker, that weighs on prices, even when the situation at origin is by no means relaxed.
This is one of the points that is easy to miss if you look at the market only through the idea: war equals uncertainty equals higher prices. Cacao does not currently work that linearly. The geopolitical situation creates uncertainty, but weak demand data sends a counter-signal at the same time. The market therefore does not react with one clear movement, but with volatility.
Why this still does not mean all-clear for the origins
What matters is what Jan adds immediately afterwards:
"The supply situation has not improved in any way."
For me, this is one of the most important sentences in the entire message. Stagnating or falling exchange prices quickly lead to the false conclusion that the situation at origin must have improved. According to Jan, that is not the case.
Especially in West Africa, meaning Ghana and Ivory Coast, structural problems continue to have an effect: climate change, weaker harvests, depleted soils, monocultures and massive pesticide use. Jan also talks about how misleading some market reports can be. Reports may say that Ghana is producing five or seven percent more again. That sounds like recovery. But when a country previously fell from around one million tons to roughly 400,000 tons, a small increase does not change the underlying situation.
The point is therefore not that the supply problem has been solved. Rather, the market is currently looking more strongly at short-term demand signals than at the structural weakness in cultivation.
What Jan describes from Ecuador, Peru and Brazil
I found it interesting that Jan does not only talk about West Africa in his voice memo, but also about Latin America. Especially in Ecuador, Brazil and Peru, there has been strong investment in cacao in recent years, partly also by players who do not come from classic smallholder structures.
Jan describes this vividly: many people saw cacao temporarily trading at 10,000 or 12,000 dollars per ton. Business cases were built on that. Even if someone calculated more cautiously with only 6,000, it still looked attractive. But at a world market price of 3,200 to 3,500, the same calculation looks completely different.
The mechanism behind this is not complicated. Professionalized farms often have a different cost base than smallholder systems. They work more with machinery, diesel, external inputs and return assumptions. If the price is far below the assumptions on which these projects were planned, investments are stopped or postponed.
In his message, Jan says that in Ecuador and Brazil "many cacao projects that are being built are currently being stopped again or not pushed further."
He also sees pressure in Peru. Many smaller cacao farms are on the market there, especially in the range of two to five hectares. The background is understandable: if you do not have access to a specialty market and essentially depend on the world market, these prices can quickly become existential when living costs have risen at the same time.
Where the Iran crisis actually shows up
This is where the geopolitical situation becomes indirectly relevant.
Not necessarily because it automatically pushes the cacao price upward. But because it creates pressure on the cost side. Jan says that in Peru, fuel prices and gas prices for cooking have in some cases even tripled.
Economically, this is very relevant, even if it is not directly visible on cacao exchange charts. For producers, what matters is not only how the price of their product moves. What matters is also how the relationship between income and living costs develops.
Jan sums this up very precisely in the voice message:
"We have world market prices that are not moving, but rising living costs."
I think this sentence explains more about the current situation than many longer market reports. It shifts the focus from the abstract commodity price to the real question: how viable is cacao under real living conditions?
Why input costs require a closer look
Another point from Jan's message that I find important concerns fertilizers, pesticides and operating inputs. Here too, he argues much more precisely than many broad debates.
On professionalized farms in Ecuador or Brazil, diesel, machinery and external inputs play a bigger role. Higher energy prices therefore affect the cost structure more directly. In smallholder cacao cultivation, things often look different. Not because everything is easier there, but because many farmers cannot afford large amounts of synthetic fertilizer anyway.
Jan makes an important distinction in his message: in cacao, the larger problem is often not fertilizer use, but the massive use of pesticides, fungicides and herbicides. Especially cheap broad-spectrum agents that work in the short term but destroy a lot in the long term.
This too is important for any market analysis. If you want to understand how global crises arrive at origin, you have to look more closely at which cultivation systems you are actually considering.
The real question: what price reaches the farmer?
For me, the message became especially relevant when Jan talked about minimum prices and living-income considerations. Ultimately, that is exactly what matters: what would have to reach the farmer so that cacao can continue to be grown under reasonable conditions?
Jan has been talking with me for some time about anchoring higher minimum prices for producers. I am fully in favor, although the process is tedious and quite bureaucratic. As a realistic orientation for cacao in the specialty segment, he mentions a farmgate price of around 5,000 dollars per ton of dried cacao beans, meaning the price farmers receive directly for their harvest. That would correspond to about 7,000 dollars per ton FOB (Free on Board), meaning the price of the goods once they are processed and ready for export. This price then includes customs duties in the country of origin, logistics costs and a small share for the cooperative, which uses it to fund important infrastructure and salaries for central staff.
Concretely, this means farmers earn significantly more for their harvest and can better secure their livelihoods. A higher farmgate price also enables them to invest in quality, sustainable cultivation and their own future.
At first, that reads perfectly. So why do we not simply do it? It is important to understand that even if we as decision-makers would happily approve this, on the other side there is still a market of buyers who have to choose more expensive prices, exactly you, dear reader. In the case of Original Beans, the company Jan works for, this is especially difficult because the B2B market is flooded by low-cost providers such as Callebaut or Valrhona. If their cacao mass or couverture costs twice as much as the competition's, it becomes much harder to sell. So it is a difficult balance.
That is exactly why I found his reference to so-called living-income benchmarks so interesting. Jan mentions a Fairtrade calculation for Ecuadorian organic cacao that lands at around 4,500 dollars farmgate price, almost exactly where Jan would like to see the price for specialty cacao. At the same time, he considers some assumptions in this calculation rather optimistic, for example around farm size or yields.
That means even a relatively market-friendly study already arrives at a price level significantly above what actually reaches farmers in many cases today.
What this means from Moruga's perspective
From Moruga's perspective, this is not an abstract calculation. It directly touches the question of what fair trade means in practice. Not as a label, but as price logic.
If you accept that good quality, agroforestry, organic cultivation and long-term soil fertility do not come for free, then this must eventually be reflected in prices. Not identically everywhere and not at the push of a button, but fundamentally, yes.
That is exactly why Jan's voice memo was so valuable to me. It does not provide a simple thesis or a clean forecast. Rather, it helps explain the mechanics behind the market. Demand, expectations, grinding figures, harvests, cost structures, price transmission and living costs interact. If you only look at the curve, you always see only a section of it.
What this suggests for 2026 and 2027
Jan does not commit to a simple forecast in his message. He does not say: prices will definitely rise now. But he also does not say: prices will definitely stay low.
His actual assessment is more sober. He thinks it is quite possible that prices will rise again once it becomes clearer how weak harvests really remain. At the same time, he sees the risk that we first go through a phase of lower prices in which more producers drop out and more projects fail, and that exactly this later creates a new shortage.
That seems to me a more plausible description of the situation than any pinpoint forecast. Especially for 2026 and 2027, it will probably be more important to understand this mechanism than to pretend the market can be predicted cleanly.
Listen for yourself: Jan's voice memo from Ecuador
Jan Schubert, Head of Sourcing at Original Beans and one of our direct trading partners, sent me a 16-minute voice message from Cuenca on this question. I find it so precise and so close to reality that we uploaded it here directly.
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