Political Instability in Ivory Coast and Its Impact on Commodity Markets

The global cocoa market, a $100 billion industry, is under siege from a perfect storm of political and economic vulnerabilities in Côte d’Ivoire. As the world’s largest producer of cocoa—accounting for nearly 40% of global supply—the West African nation’s political instability ahead of its October 2025 presidential election poses a direct threat to commodity prices, supply chains, and investor confidence. This analysis dissects the interplay of election-related risks, governance failures, and climate-driven production challenges to assess the cocoa sector’s fragility.

Political Uncertainty: A Fourth Term and Fractured Opposition

President Alassane Ouattara’s decision to seek a controversial fourth term has reignited ethnic and regional tensions that have historically destabilized the country. According to a report by Bloomberg, opposition figures like Laurent Gbagbo and Tidjane Thiam have been excluded from the ballot through legal and political maneuvering, deepening divisions and raising fears of unrest [2]. The lack of meaningful dialogue between the government and opposition exacerbates the risk of protests or even military intervention, as seen in the 2010–2011 crisis [4].

This instability is compounded by historical precedents. During the 2010–2011 civil conflict, cocoa exports via Abidjan’s port—a critical gateway for 52.9% of the country’s total exports—plummeted, disrupting global supply chains [3]. While current cocoa production remains stable, the specter of renewed violence could trigger export halts or infrastructure damage, as seen in past crises [5].

Governance Failures: EU Regulations and Small-Scale Producer Bankruptcy

Governance issues further strain the cocoa sector. The European Union’s 2025 deforestation-linked commodity regulations, aimed at curbing illegal cocoa trade, have disproportionately impacted small-scale Ivorian producers. As Reuters reports, the mandatory digitized traceability system for cocoa beans has forced smaller firms to either exit the market or face bankruptcy, with compliance costs exceeding their operational budgets [1]. Critics argue this creates a de facto monopoly for Western multinationals, undermining local cooperatives and exacerbating supply-side fragility [1].

Meanwhile, the Ivorian government’s own policies have failed to address systemic issues. Despite a 50% increase in farmgate prices to align with global surges, local producers have not reaped proportional benefits due to fixed pricing structures [6]. This disconnect between global and local markets highlights governance inefficiencies that could worsen during election-related disruptions.

Market Vulnerabilities: Price Volatility and Production Delays

The cocoa market’s vulnerabilities are already manifesting. In July 2025, cocoa grind in Côte d’Ivoire fell 31.2% year-on-year to 39,301 metric tonnes, attributed to poor bean quality and low mid-crop volumes [1]. Arrivals at key ports like Abidjan and San Pedro dropped 30% compared to the previous year, signaling logistical bottlenecks [1]. The Coffee and Cocoa Council (CCC) has slashed export projections for the 2025/26 season from 1.3 million to 1.2 million tons, citing dry weather conditions that stunted flower and pod development [4].

Global prices, meanwhile, have surged over 400% since early 2023, peaking at $10,700 per tonne in Q1 2025 before easing to $8,400 by June [1]. This volatility is driven by supply shortages in West Africa, exacerbated by El Niño-related droughts and disease outbreaks. The IMF has warned that without urgent reforms to address smuggling and inefficiencies in state-owned enterprises, the sector will remain prone to shocks [3].

Strategic Risks for Investors

For investors, the convergence of political and economic risks creates a high-stakes environment. The U.S. government’s looming 15% tariff on Ivorian cocoa exports, as reported by BusinessLive, forces the country to seek alternative buyers in Europe, potentially reducing its competitive edge [3]. This shift could lead to regional supply chain realignments, with Ghana’s recent 62% price hike for farmers further complicating market dynamics [2].

Moreover, the cocoa sector’s reliance on global prices and production cycles makes it uniquely susceptible to political shocks. A repeat of the 2010–2011 crisis could trigger a 20% drop in global cocoa supply, sending prices into a tailspin and destabilizing economies dependent on the commodity [5].

Conclusion: A Call for Resilience

Côte d’Ivoire’s cocoa market stands at a crossroads. While the country’s economic growth projections remain optimistic—7% GDP growth in 2024 and 2025—the political and governance challenges outlined above threaten to derail this trajectory. Investors must weigh the risks of election-related instability, regulatory overreach, and climate-driven production declines against the potential for policy reforms under the Ivory Coast-Ghana Cocoa Initiative (CIGCI) [6].

For now, the cocoa sector remains a barometer of both domestic and global market health. As the October 2025 election approaches, the world watches to see whether Ivory Coast can navigate its political turbulence—or if the next crisis will leave the cocoa market in its wake.

Source:
[1] Small Ivory Coast cocoa firms say EU deforestation rules might bankrupt them [https://www.reuters.com/sustainability/climate-energy/small-ivory-coast-cocoa-firms-say-eu-deforestation-rules-might-bankrupt-them-2025-07-24/]
[2] Thiam Vows to Fight On in Bid to Become President of Ivory Coast [https://www.bloomberg.com/news/articles/2025-09-05/thiam-vows-to-fight-on-in-bid-to-become-president-of-ivory-coast]
[3] Energy, cocoa sectors require urgent, decisive actions – IMF [https://www.gnbcc.net/News/Item/9281]
[4] Global Cocoa Market – January 2025 [https://cropgpt.ai/global-cocoa-market-january-2025]
[5] Ivory Coast crisis: impact on the international cocoa trade [https://www.bbc.com/news/business-12677418]
[6] Country Risk Report Côte d'Ivoire [https://www.allianz.com/en/economic_research/country-and-sector-risk/country-risk/cote-divoire.html]