Cocoa bean prices are unlikely to return to recent highs, as increased industry stockpiles act as a buffer against supply disruptions, UBS reported, citing comments from Barry Callebaut CEO Jeroen Sweers (referencing CEO Jeroen Sweers/Hein Schumacher context).
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Barry Callebaut, the world’s largest chocolate manufacturer with a market share of around 20%, believes the current cocoa market situation differs significantly from the conditions that triggered a sharp price surge a few years ago.
Cocoa prices have recently risen to approximately £4,000–£4,500 per tonne, up from £2,000–£2,500 earlier this year. Current levels appear to already factor in some of the weather-related risks associated with El Niño.
The chocolate industry currently holds cocoa bean inventories of around 500,000 tonnes, equivalent to roughly 10% of the annual global harvest. This has been supported by two recent surplus harvests—a stark contrast to the deficits and inventory depletion seen during the previous price spike.
This buffer could prevent cocoa prices from returning to recent highs and limit cost pressures for chocolate companies in 2027–2028.
Barry Callebaut sees no compelling reason for another significant hike in chocolate prices for consumers. Projected average selling prices for consumer chocolate companies for 2026 are based on cocoa bean costs in the £4,000–£5,000 per tonne range. This implies that current cocoa spot prices are unlikely to trigger further increases in selling prices. Barry Callebaut anticipates increased promotional activity across several markets and allows for the possibility of slight price reductions on select products.
More stable or moderately declining chocolate prices could help sales volumes recover following two to three years of price hikes that negatively impacted consumer demand.
Barry Callebaut is also placing greater emphasis on specialized solutions and premium products, while expanding regional decision-making autonomy across 10 key markets.
UBS has maintained a “Neutral” rating on Barry Callebaut shares with a target price of CHF 1,180, based on a discounted cash flow model. At the time of the report, the shares were trading at CHF 1,125, and analysts view the company’s valuation—at approximately 20 times projected earnings for the 2027 fiscal year—as reflecting a balanced risk-reward profile.
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