Cocoa prices, which soared to historic highs last year due to crop failures in Cote d’Ivoire and Ghana, are now expected to fall sharply by the end of 2025, offering some relief to chocolate producers globally, including Cyprus-based Alkis Hadjikyriacos (Frou Frou Biscuits).

According to the company’s 2024 annual financial report, cocoa prices are projected to decline by nearly one third this year as supply improves beyond West Africa and demand softens in response to last year’s price surge.

Cocoa had closed 2024 as the top-performing commodity, with prices almost tripling due to adverse weather and agricultural disruption in the two countries, which together account for around 60 per cent of the global cocoa supply.

In Cyprus, the sharp price increase had forced Frou Frou to adjust its pricing policy. In April 2024, the group raised prices for both its locally produced and imported chocolate products by 20 to 30 per cent, after absorbing part of the increase in raw material costs.

The report also refers to the broader global context, noting that “the ongoing instability in Ukraine and the crisis in the Middle East are causing disruptions in supply chains and increasing transportation costs.”

It adds that climate change is contributing to further uncertainty, with extreme weather and natural disasters increasingly affecting agricultural production and logistics networks.

At the same time, the company addresses the ongoing global trade tensions, including a sweeping package of US tariffs affecting EU exports.

According to the report, the group is not expected to face any material impact from the US trade measures, as it does not engage directly with American suppliers.

It does, however, acknowledge that indirect effects on the Cyprus economy remain uncertain.

“The group’s management is not in a position to foresee all developments that could have an impact on the Cyprus economy and consequently, what effect, if any, they could have on the group’s future financial performance, cash flows and financial position,” the report states.

Nevertheless, it is underlined that the company continues to take “all necessary measures to maintain the group’s viability and expand its operations in the current business and economic environment.”

In terms of performance, the group recorded a modest increase in turnover and profitability compared to 2023.

Turnover rose by 0.73 per cent to €24,394,370, while gross profit increased by 2.24 per cent to €9,075,405, mainly due to lower electricity and fuel costs.

Profit from operations also climbed by €46,957, reaching €2,791,206.

Turnover from locally produced products fell slightly to €14,111,860, down from €14,268,678 the previous year.

However, imported products saw an increase of 3.35 per cent, reaching €10,282,510 from €9,949,131 in 2023.

Finally, net financing costs dropped from €209,279 to €157,825 following loan repayments.