NEW YORK CITY, New York: Halloween may look a little less sweet for U.S. chocolate lovers this year. A new report from Wells Fargo's Agri-Food Institute warns that prices for chocolate will stay unusually high this season, as cocoa costs remain more than double what they were at the start of 2024.

Although wholesale cocoa prices have eased slightly from late-2024 peaks, candy manufacturers are still passing higher costs on to consumers. Many are also shrinking package sizes or cutting seasonal product lines to manage expenses, the report said.

The surge in cocoa prices stems from severe supply disruptions in West Africa, which produces about 70 percent of the world's cocoa. Heavy rains in late 2023 caused black pod disease and crop rot, followed by El Niño-driven droughts in 2024 that worsened the spread of cocoa swollen shoot virus.

As a result, global cocoa production fell 12.9 percent year-on-year to 4.37 million metric tons in the last crop season, creating a 494,000-metric-ton deficit, the largest in more than 60 years, according to the International Cocoa Organization (ICO).

Production dropped 25.3 percent in Ivory Coast, the world's largest producer, and 31.3 percent in Ghana, the second-largest.

Wells Fargo said the outlook remains grim. Preliminary assessments from exporters indicate a further 10 percent decline in output for the 2025-2026 crop year, which began in October, across the four major West African producers.

"It is likely that cocoa prices will remain high at least through the next crop year ending September 2026 given the current record cocoa supply deficit," the report stated.

The squeeze is being compounded by new U.S. tariffs on major cocoa suppliers — including Ecuador, Ivory Coast, the Dominican Republic, and Ghana — which now face reciprocal tariffs of 15 percent to 25 percent on cocoa beans and products such as cocoa butter and powder. Importers and chocolate makers must pay these duties when shipments arrive in the United States.

Given that cocoa can only be produced in tropical regions, the combination of tight supply and higher import costs is expected to keep retail prices elevated well beyond Halloween.

To cope, Wells Fargo analysts suggest consumers opt for candies with less cocoa, compare prices across retailers, and consider store brands or generic alternatives, which often cost less than premium or branded chocolates.