Cash crunch stalls cocoa and coffee trading around the world

cocoa and coffee futures is leaving traders so cash-strapped that many no longer have enough money to ship the two commodities around the world.

Rising prices forced traders to deposit large sums of money with the New York exchange to back their futures positions. With so much cash locked up, it’s become much harder to finance cargoes to move beans from where they are produced to where they are consumed.

To make matters worse, a rising market has prompted some farmers that sold at lower prices to default, leaving traders without the supply they need. Chocolate maker Hershey Co. argues there’s a “significant disconnect” between prices in the physical and the futures market, and that a lack of liquidity is allowing for unprecedented volatility.

“The cash market and the availability of financing, that’s the problem,” said Pam Thornton, a veteran commodity trader who’s best known for her role at former cocoa hedge fund Armajaro Asset Management.
Cocoa futures traded in New York almost tripled last year as dry weather and the spread of disease hurt crops in West Africa, which accounts for about 60% of the global supply. While prices have dropped 28% in 2025, they are still more than double the average of the past decade.

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The coffee rally followed not long after, with a smaller-than-expected crop in top producer Brazil helping send New York futures surging 20% this year. That’s on top of an almost 70% gain in 2024.

Many companies that buy and sell cocoa also trade coffee, making the cash crunch worse.