Cocoa Prices Drop, But Chocolate Makers Remain Cautious

Cocoa prices have fallen in recent weeks, yet chocolate manufacturers continue to limit production increases. This cautious stance contrasts with the typical behavior of food producers when raw material costs decline. The sugar segment within the food industry remains particularly vulnerable to low prices, with Südzucker Group estimating continued losses for the 2025-26 marketing year.

A recent product recall has further complicated the situation for chocolate makers. The U.S. Food and Drug Administration reported that Spring & Mulberry has recalled a specific line of chocolate bars due to potential salmonella contamination. No illnesses have been reported so far, but the recall has raised questions about food safety and supply chain management.

Meanwhile, XPeng has announced plans to establish local supply chain teams in Europe and Southeast Asia in 2026, as part of a broader push to expand its international footprint. The company aims to localize production to reduce costs and improve logistics efficiency in key markets.

Why Are Chocolate Makers Holding Back Despite Lower Cocoa Costs?

Despite the recent decline in cocoa prices, chocolate manufacturers have not increased production levels. Südzucker Group, one of the largest sugar producers, has projected continued losses in its sugar segment due to weak global market prices. For the 2025-26 marketing year, the company expects operating losses to range between EUR 150 million and EUR 250 million.

The reluctance of chocolate makers to ramp up production could be linked to broader economic uncertainties, including rising costs for raw materials and logistics. Additionally, recent recalls have heightened consumer concerns about food safety, which may affect purchasing behavior in the short term.

How Are Market Players Reacting to the Chocolate Recall?

The FDA has confirmed that Spring & Mulberry has issued a voluntary recall of its Mint Leaf Date-Sweetened Chocolate Bar. The recall affects specific batches with lot code #025255, which were sold online and at select retailers since September. The contamination was identified through routine testing by a third-party laboratory.

Consumers who purchased the affected product are being advised to dispose of it and request a refund by contacting the company directly. While no illnesses have been reported, the recall has raised concerns about the safety of chocolate products and the reliability of supply chains in the food industry.

What Strategic Moves Are Driving XPeng's International Expansion?

XPeng is deepening its global presence by setting up dedicated supply chain teams in Europe and Southeast Asia. The company has already begun assembling vehicles in Austria and Malaysia, and the new teams will focus on securing regional suppliers, enhancing operational efficiency and improving supply chain responsiveness.

The move is part of a broader strategy to expand the company's presence in 25 European markets, with the P7+ sedan set to begin deliveries in April. Localized production and procurement are expected to reduce logistics costs and accelerate delivery times.

The company aims to double its overseas deliveries in 2026, following a 96% increase in international shipments in 2025. XPeng's CEO has stated that the company is confident that half of its sales will come from global markets within the next decade.

These strategic moves highlight the growing importance of localized supply chain strategies in the automotive and food industries alike.