Over the past two years, the cost of cocoa butter — a beloved natural ingredient in skincare — has climbed dramatically. For many brands and formulators, this has transformed what was once a relatively affordable raw material into a significant cost pressure point. But what’s really behind this sharp increase? The answer lies in a combination of environmental, agricultural, economic and market factors — many of which go well beyond cosmetics.
1. Global Cocoa Supply Has Been Disrupted
The most fundamental driver of cocoa butter prices is the availability of cocoa beans — the raw material from which cocoa butter is extracted.
* Côte d’Ivoire and Ghana — two West African countries that together produce a large majority of the world’s cocoa — have suffered significant declines in cocoa output in recent seasons. Adverse weather patterns such as droughts and heavy rains have damaged crops. These unusual weather events have also accelerated the spread of fungal diseases like black pod disease and the swollen shoot virus, both of which reduce yields and damage bean quality.
* The overall global cocoa supply has not kept pace with demand. Even slight contractions in harvest size can create tight markets, pushing prices up. In some cocoa seasons, the global stocks-to-usage ratio — a key measure of supply health — has dropped to multi-decade lows.
Because cocoa butter must be derived from beans, any shortage in cocoa bean supply immediately tightens the available volume of cocoa butter — with direct upward pressure on prices.
2. Climate Change and Extreme Weather Are Increasing Volatility
Climate patterns like El Niño, coupled with long-term climate change, have brought erratic rainfall, drought and temperature extremes to West Africa — the heart of the cocoa supply chain.
* These conditions negatively affect cocoa flowering and fruit development, ultimately reducing yields. For a crop so sensitive to stable growing conditions, these swings have significant consequences.
* Extreme weather events are now more frequent and intense, adding volatility to the global cocoa market and making long-term planning harder for farmers and exporters alike.
3. Rising Costs and Broader Supply Chain Pressures
It’s not just bean scarcity that’s driving the cost of cocoa butter upward — getting those beans to market has also become more expensive:
* Transport and logistics costs have risen, amplified by congested ports, higher energy prices and supply chain bottlenecks. These factors add to the cost of importing beans and exporting processed cocoa products like butter.
* High costs for agricultural inputs, including fertilisers and labour, have increased the cost of producing cocoa beans in the first place. Even if production volumes were steady, these rising input costs tend to make the raw material more expensive.
4. Demand Across Multiple Industries Has Grown
While supply has been under strain, global demand for cocoa and cocoa derivatives has been growing across sectors:
* Traditional demand from the chocolate and confectionery industries has bounced back strongly after pandemic disruptions. Chocolate consumption continues to rise in many markets worldwide.
* In recent years, cocoa butter has also become more sought after in cosmetics, natural skincare and wellness products due to its rich emollient properties, clean-label appeal and plant-based versatility. This has placed additional competitive demand on a finite supply.
The combination of increasing demand and tightening supply creates a classic price squeeze — and cocoa butter is no exception.
5. Market Dynamics Can Exacerbate Price Spikes
Finally, commodity markets themselves can amplify price movements. When traders anticipate tighter markets or future shortages, they often drive futures prices higher through speculative activity. While such trading doesn’t change the physical supply of beans, it can influence how manufacturers and distributors price their contracts — contributing to higher costs being passed down to buyers.
Source: historical price data (USD/kg) from commodity markets.
What This Means for Skincare Brands
For natural skincare brands that rely on high-quality cocoa butter, these market dynamics have real implications:
~ Formulation costs are up — especially for organic or ethically sourced grades.
~ Supply unpredictability makes long-term ingredient planning harder.
~ Transparency and sustainability commitments matter more than ever, as conscious consumers expect brands to navigate these pressures responsibly.
Understanding the broader forces driving cocoa butter prices helps explain why this once-steady ingredient has become one of the more volatile costs in today’s natural skincare supply chain.
As a result of these increased raw material costs, coupled with higher production overheads in general, severe pressure on margins is being applied, which may ultimately result in price increases to the finished products.
Whatsapp us!