Food — Noozify Original — October 28, 2026

Cheap Cocoa, Pricey Chocolate: The Lag Behind Halloween Candy Prices

By Adam Cannizzaro

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Commodity watchers had reason to expect a cheaper Halloween. Cocoa futures in New York peaked at $12,931 a ton in late 2024, more than two and a half times the previous record, which had stood since 1977. By March of this year they had fallen to $2,846, a drop of nearly 80 percent. The candy aisle did not get the memo. In September, prices for sugar and sweets were 5.5 percent higher than a year earlier, according to the Agriculture Department's Economic Research Service, and the government's price index for candy and chewing gum, which holds most chocolate, was up 7.7 percent. Hershey, the maker of Reese's and the American Kit Kat, reported about 14 points of price increases in its North American candy business for the quarter that ended in June, along with a volume decline of about 10 points.

This is not quite the scandal it looks like, and it is not entirely innocent either. The price on a bag of fun-size bars reflects the cocoa market of about a year ago, filtered through hedging contracts, warehouse stocks, and retailer negotiations. Reuters, reporting on the industry in May, put the delay at 10 months or so, because chocolate makers lock in purchase prices months in advance and hold large inventories.

Chocolate companies do not buy beans the week they need them. They fix prices months and often years ahead through futures and forward contracts, partly so that one bad harvest cannot wreck them between earnings calls. Hershey says in its own results that it "often purchase[s] commodity contracts to price inventory requirements in future years." Its finance chief, Steve Voskuil, told an investor forum in May that the aim is to smooth the impact over time, so that "if we do need to make pricing decisions, we have enough runway" to work them through the system. Costs follow a rolling average of past prices, so they rise after the market does and fall after it, too. On Hershey's July earnings call, Voskuil said the company's highest cocoa cost had come in the third quarter of 2025, the better part of a year after the futures market peaked.

The same arithmetic runs in reverse, on the same delay. The cheap beans of this spring are, for the most part, headed into chocolate sold next year, and Voskuil told analysts the company has "good visibility into cocoa deflation next year, even if futures remain around current levels." Next year, that is, not this October. This October's bags were costed largely against contracts written while cocoa still traded above its old record.

We lined the two prices up month by month. The world cocoa price, as tracked by the World Bank, peaked in January 2025 at an average of $10,750 a ton and has since fallen by close to half. The government's price index for candy and chewing gum kept climbing for another 17 months and did not peak until June 2026. In September it was still 7.7 percent higher than a year earlier, and about 55 percent above where it stood in January 2019.

There is a second lag, and this one is a choice. When costs rose, chocolate makers passed them through in large, public increases. When costs fall, the first beneficiary is the margin that absorbed the hit. In the June quarter, Hershey's North American candy business posted a segment margin of 32.5 percent, up 8.3 points from a year earlier, and the company credited both higher prices and lower commodity costs. Few companies volunteer to walk shoppers back down from a new price point, and a list-price cut is far harder to undo than a coupon.

So relief, when it comes, tends to arrive sideways. Reuters reported that supermarkets had been pressing chocolate makers to lower prices since around mid-2025, and that Mondelez, the owner of Milka and Toblerone, had trimmed some prices in Europe and was starting to see volumes rise. In an American candy aisle, relief is more likely to look like a deeper holiday discount, a bigger bag at last year's price, or a buy-one-get-one tag. A promotion can be pulled the moment cocoa jumps again. A price cut is a promise.

The more durable changes happened inside the wrapper. In Germany, Mondelez cut its Milka bar from 100 grams to 90 while keeping its size and design the same, and in May a Bremen court ruled that the change misled shoppers. (Mondelez can still appeal.) A thinner bar at the old price is a price increase that never has to be reversed, because it was never announced as one. Makers also stretched their chocolate with more wafers, caramel, and nuts, a fix with commodity risks of its own, as the Dubai chocolate craze showed pistachio buyers.

Then there is the recipe. Under the Food and Drug Administration's standard, American milk chocolate must contain at least 10 percent chocolate liquor, 3.39 percent milkfat, and 12 percent milk solids, and its only added fats may be cocoa butter and dairy fats. A coating that swaps in cheaper vegetable fats cannot use the name, so it goes out as "chocolate candy" or something similar. In February, Brad Reese, grandson of the man who invented Reese's Peanut Butter Cups, accused Hershey of replacing milk chocolate with such coatings in several Reese's products, pointing to a Valentine's bag of Reese's Mini Hearts whose package listed "chocolate candy and peanut butter crème."

Recipes are reversing faster than prices. At the end of March, Hershey said it would return to "classic milk and dark chocolate recipes" across its Reese's and Hershey's products by 2027, a change it says touches less than 3 percent of Reese's items. Barry Callebaut, the world's largest chocolate maker and cocoa processor, told Reuters that at current cocoa prices, real chocolate can be cheaper to make than alternatives built on vegetable fat.

All of this has cost chocolate something it cares about. Circana, the market research firm, found that chocolate's share of seasonal candy sales in Halloween week fell from 55 percent in 2024 to 51 percent in 2025, and it says chocolate "continues to face greater pricing pressure than non-chocolate" heading into this Halloween. Whether the shoppers who switched to gummies come back is the one lag nobody can hedge.

None of this would have happened without a collapse at the other end of the chain. Ghana and Côte d'Ivoire grow more than half the world's cocoa, and the 2023/24 season went badly for both. In December 2023, rainfall across West Africa ran at more than twice the 30-year average, spreading black pod disease, and drought followed in February. The cocoa swollen shoot virus had by then infected about 590,000 of Ghana's 1.38 million hectares of cocoa, and a replanted tree takes years to bear, the same slow biology that keeps beef expensive while the cattle herd takes years to recover. The International Cocoa Organization put the season's global shortfall at 489,000 tonnes.

The farmers who grew the scarce beans mostly missed the boom, because of another lag, this one written into policy. Regulators in Ghana and Côte d'Ivoire sell some 80 percent of their beans to global traders a year in advance and set a fixed farmer price at the start of each season. In October 2024, with New York futures around $7,700, Côte d'Ivoire set its farmgate price at 1,800 CFA francs a kilogram, about $3,060 a ton, which encouraged smuggling to neighbors such as Liberia and Guinea, where buyers paid closer to the world price.

Then the lag turned on them. Côte d'Ivoire opened the 2025/26 season at a record fixed price worth about $5,000 a ton, only to watch world prices slide toward $3,100. Traders who bought at the fixed price would have resold at a loss, so they mostly stopped buying, and Reuters reported in February that Ghanaian farmers had not been paid since November. Ghana cut its farmer price by nearly a third on February 12th. Côte d'Ivoire cut its price to 1,200 CFA francs (about $2,120 a ton) in March and, on September 1st, kept it there for the new season, less than half of what it had promised farmers a year earlier.

The futures market, meanwhile, had moved on to the next scare. In July, Ghana's cocoa board forecast that production would fall by at least 16 percent in the 2026/27 season, citing likely El Niño conditions, disease, aging farms, and illegal gold mining. London cocoa, which traded around £2,100 a ton in early March, settled at £4,160 on October 26th. In New York, the December contract settled at $5,490 that day, well under half the record and nearly double the low.

That puts next year's candy aisle on the same clock as this one. The beans for Halloween 2027 are being priced now, partly at this spring's lows and partly at this summer's rebound. If the pattern holds, the relief will show up late, show up as deals rather than a lower sticker, and show up as the words "milk chocolate" back on a few more wrappers. The futures market can reprice cocoa in an afternoon. The candy aisle takes about a year.