Looking at a chart of cocoa prices, one would conclude that the raw ingredient of chocolate experienced a roller-coaster ride in 2023 and 2025. Hovering between US$2,200–US$2,800 ($2,823–$3,593) per metric tonne for most of the 2021 to 2022 period, cocoa prices climbed to more than US$4,300 in 2023, before skyrocketing to highs of almost US$12,000 in April and December 2024, with a dip to around US$6,400 in between the two peaks. Since then, the price of cocoa has been declining and, as of March, is hovering around US$3,000–US$3,500.
As with most price fluctuations, the balance between supply and demand is the key determinant. In this instance, the jaw-dropping price spikes in 2024 and 2025 were attributed to unfavourable weather conditions affecting supply. The ICCO notes in November 2023 that “unconducive” weather conditions in Côte d’Ivoire and Ghana have been the root cause of the supply shortage. It highlighted heavy rains affecting farming activities, the spread of diseases and haulage operations in the two countries.
Since both countries produce about two-thirds of the global cocoa bean supply, the ICCO notes that any change in their production tends to have a “significant” impact on the cocoa market.
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For investors, the fortunes of three stocks — Olam Group, JB Foods and Delfi — listed on the Singapore Stock Exchange are tied to cocoa. The three companies also represent different positions along cocoa’s supply chain: Olam, through its subsidiary Olam Food Ingredients (OFI), at the head or upstream position as a supplier; JB Foods, a cocoa processor at the midstream; and Delfi, at the downstream position as a chocolate manufacturer.
In the face of soaring cocoa prices over 2024 and 2025, which of these three Singapore-listed companies can pass on higher cocoa costs to their customers?
Olam: Supplying the world’s food, feed and fibre
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Olam Group is a global food and agri-business which supplies food ingredients, feed and fibre. Group CEO Sunny Verghese reiterates that Olam is in the “business of providing living essentials, daily living essentials, to customers across the globe” at its FY2025 results briefing on Feb 27, attended by The Edge Singapore.
The company is divided into three business units — Olam Food Ingredients (OFI), Olam Agri and The Remaining Olam Group. Olam Agri is being sold to the Saudi Agricultural and Livestock Investment Company.
At the upstream of the value chain, Olam Group, through its subsidiary OFI, focuses on the raw materials and ingredient platforms, including cocoa, coffee, dairy, nuts, and spices.
The Edge Singapore requested cocoa-related figures from OFI but understands the company does not “break out financial/volume information at the product level”. Accordingly, this analysis provides broader insight into OFI’s Global Sourcing business segment, including pricing power, operational efficiency and cost control. By proxy, this could indicate whether OFI passes on any price increases for cocoa and other products to its customers.
For FY2023, when cocoa prices began to rise, OFI’s revenue and sales volume declined y-o-y with the company saying that it was “selective” in prioritising opportunities that enhanced margins and returns. Correspondingly, ebit declined on lower sales volume, but ebit margin remained stable. Ebit per metric tonne declined 4.6% y-o-y to $108.8, indicating lower profit per unit. In comparison, ebit per unit of invested capital declined to 6.8% from FY2022’s 7.4%, suggesting OFI was experiencing weaker pricing power, with the cocoa price increase not passed through to customers. It may also suggest a decline in operational efficiency or cost control.
For FY2024 and FY2025, revenue surged y-o-y to $14.2 billion and $15.6 billion, respectively, while sales volume remained stable in FY2024 at around 2,700 metric tonnes before declining to around 2,400 tonnes in FY2025. Olam said that the higher revenue for both years was driven by the pass-through of raw material price increases, particularly in cocoa and coffee.
Ebit rose 6.1% y-o-y to $313 million for FY2024 and 6.5% y-o-y to $333 million for FY2025, with ebit margin declining to slightly below 4.5% for both years. Ebit per metric tonne increased 5.8% y-o-y to $115 for FY2024 and jumped 18.6% y-o-y to $136.5 for FY2025. However, ebit per unit of invested capital fell further to 6% and 5.6% for FY2024 and FY2025, respectively.
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With management explicitly stating that higher raw ingredient prices were passed on to customers, it is not surprising that ebit per metric tonne increased, i.e., profit per unit of sale increased. However, ebit margin and ebit per unit of invested capital declined, suggesting that while OFI has pricing power, it has challenges managing costs and achieving operational efficiency.
Olam’s shares closed at 87 cents on March 20, representing a 40% decline since the start of 2023.
JB Foods: Squeezed in the middle?
JB Foods is the owner of JB Cocoa, a cocoa ingredient brand. With production facilities in Malaysia and Indonesia, JB Cocoa’s products — cocoa mass, cocoa butter, and cocoa powder — are exported to 65 countries. These products are used for the production of chocolate, chocolate confectionery, and various cocoa-related food and beverages.
As an end-to-end cocoa ingredient provider, JB Cocoa can customise cocoa ingredient products, in particular, cocoa powder, while improving quality and production efficiency, as well as optimising capacity through production techniques and process control systems.
For JB Foods, revenue for FY2023 grew y-o-y by around US$86.2 million to US$595.8 million while cost of sales increased y-o-y by US$94 million (mainly due to higher cocoa prices) to US555.5 million. At first glance, the increase in cost of sales exceeds the increase in revenue, suggesting that higher cocoa prices were likely not fully passed through to customers. However, JB Foods elaborated that gross profit and margin declined y-o-y for FY2023 to US$40.3 as a US$12.3 million fair value mark-to-market loss from hedging activities was booked, i.e. JB Foods had likely fully passed-on the raw ingredient price increase in absolute terms, and this would have been reflected in the form of a positive difference between the increase in revenue and increase in cost of sales for FY2023.
The company changed its financial year-end to March 31 and, as a result, reported results for 15 months, with FY2024 becoming FY2025. Revenue during the 15 months of FY2025 ended March 31, 2025, soared to US$1.66 billion from FY2023’s US$595.8 million, an increase of US$1.06 billion mainly due to higher average selling prices. Cost of sales exceeded US$1.55 billion, up US$997.7 million, mainly due to higher cocoa prices. With revenue exceeding cost of sales, this suggests that higher raw ingredient costs were fully passed through to customers.
Gross profit jumped to US$104.3 million for the 15 months compared to FY2023’s US$40.3 million. However, gross margin declined to 6.3% in FY2025 from 6.8% in FY2023. This suggests that although JB Foods could pass on the increase in cocoa prices to customers in absolute terms, it didn’t pass it through in terms of margins; i.e., revenue increased at a slower rate than cost of sales.
On a pro-forma basis, if the financial year ended Dec 31, 2024, revenue would be nearly US$1.33 billion; gross profit at US$83.4 million; and cost of sales at US$1.24 billion. This means that the revenue, gross profit and cost of sales for January to March 2025 would be US$331.5 million, US$20.9 million and US$310.6 million, respectively.
For 1HFY2026 ended Sept 30, 2025, the company issued positive profit guidance. In its Nov 6, 2025, bourse filing, JB Foods announced that shareholders could expect a significant increase in the unaudited profit before tax compared to the previous corresponding period. This was attributable to operational improvements, higher hedging gains, and higher margins for customers’ contracts delivered during this period.
The company eventually reported US$794.5 million in revenue, US$102.5 million in gross profit and US$692 million in cost of sales for 1HFY2026. Combined with the first three months of 2025, the company would have reported revenue of US$1.13 billion, gross profit of US$123.4 million and cost of sales of US$1.0 billion for the nine months ended Sept 30, 2025.
Hence, on a pro forma basis, if FY2025 ended Dec 31, 2025, revenue would be above US$1.5 billion, gross profit at US$164.5 million and cost of sales at around US$1.34 billion. The increase in revenue for FY2025 (pro forma) would be US$175.3 million, exceeding the increase in cost of sales of US$94.3 million, with the gross profit margin rising to 11%. This suggests that not only was JB Foods able to pass through the higher cocoa costs in absolute terms, but also to increase its margin, as it stated in its announcement.
Shares in JB Foods have risen more than 50% since the start of 2023, closing at 68 cents on March 20.
Delfi: Feeding generations of sweet teeth
Singapore-headquartered Delfi is a manufacturer and seller of chocolate confectionery products with two manufacturing facilities, one in Indonesia and the other in the Philippines. It markets and distributes its own-branded products in its core markets of Indonesia, Philippines, Singapore and Malaysia. Additionally, its products are available in over 10 countries, including Thailand, Brunei, India, South Korea and Vietnam.
On its website, Delfi says that its chocolates have “delighted many generations” of Indonesians and Filipinos, who grew up eating them. In addition to its own brands, Delfi also distributes products from other brands or agency brands.
From 2021 to 2025, the gross profit margin for Delfi peaked at 30.4% in FY2022 before declining y-o-y to 28.1%, 27.4% and 26.6% in FY2023, FY2024 and FY2025, respectively. Meanwhile, gross profit peaked in FY2023 but subsequently declined over the next two years, along with gross profit margin. From Delfi’s financial figures, the increase in cost of sales outpaced the increase in revenue in FY2024 and FY2025, suggesting that Delfi was unable to fully pass through higher raw ingredient — cocoa — prices.
Delfi attributed the lower gross margin to increased promotional spending in FY2023 to fend off rising competition and to a strategic increase in investments to further strengthen its core brands. The company mentioned that commodity prices, especially cocoa, had been “soaring” due to global economic and geopolitical uncertainty that was straining supply chains. It added that with cocoa prices reaching “historic” levels, this could dampen consumer confidence in 2024 and moderate profit growth.
For FY2024, Delfi attributed the lower gross margin to depreciation of regional currencies, particularly a weaker Indonesian rupiah against the US dollar, which impacted its raw material costs. As such, it adjusted the prices of key Indonesian brands in May 2024.
Delfi noted that the increase in cocoa prices was the main factor affecting chocolate manufacturers’ earnings in its FY2024 results announcement. In Delfi’s FY2024 annual report, CEO John Chuang said that volatility in the cocoa market is likely to cause an increase in chocolate retail prices. “Elevated cocoa bean costs, combined with broader economic pressures, could weigh on consumer sentiment as they adjust to higher prices, adding to the pressures in our markets,” he added.
In response to the “sustained” increase in cocoa prices, Delfi said it had implemented mitigation measures, including price adjustments and improved operational efficiency; i.e., it was unable to fully pass on the cost increase and had to rely on other measures to maintain margins or minimise declines.
For FY2025, the gross margin decline was attributed to the depreciating rupiah against the greenback, increased promotional spending and lower margins from the agency brands segment. UOB Kay Hian’s Heidi Mo and John Cheong note that gross margin was squeezed by “elevated” cocoa prices in their Feb 26 report, while CGS International analyst Tay Wee Kuang, in his March 20 note, makes a similar observation that high cocoa prices have impacted Delfi’s gross margin since 2022.
However, with cocoa prices falling to below US$3,500 per tonne in recent months, Mo and Cheong believe that the worst is over for Delfi and that a gradual recovery for the company is on the cards. They expect lower cocoa prices to gradually support margin recovery from FY2025’s 26.5% and revise upwards earnings estimates for FY2026 and FY2027 by 7%–10%. UOBKH upgrades Delfi to “buy” at $1.12 from the previous “hold” call at 82 cents.
Similarly, RHB’s Alfie Yeo is positive on the impact of lower cocoa prices. In his Feb 25 report, he also expects margins to recover in FY2026 and estimates earnings to rise by 10% and 5% in FY2026 and FY2027, respectively. Yeo maintains his “buy” rating, with a higher target price of. Yeo maintains his “buy” rating, with a higher target price of $1.20 from December 2025’s 94 cents.
DBS’s Chee Zheng Feng is, however, more cautious. In his Feb 26 report, he believes that Delfi has hedged cocoa costs for six to 24 months and, consequently, the bulk of the margin recovery will occur in FY2027 rather than in FY2026, which will see limited upside. Surprisingly, despite his less sanguine outlook, he estimates earnings to grow 6% y-o-y in FY2026 and 26% y-o-y in FY2027, based on estimated adjusted earnings of US$32 million. For Chee, he maintains Delfi at a “hold” rating, with a higher target price of $1, up from 80 cents.
Striking a similar tone, CGSI’s Tay expects gross margins to improve gradually from 1QFY2026 onwards as Delfi’s cocoa hedging contracts end and projects earnings to accelerate in FY2027. He also points out that Delfi’s strong cash generation — US$24.2 million in FY2025 versus an outflow of US$11.2 million in FY2024 — could sustain higher marketing expenses in FY2026, positioning Delfi to secure stronger earnings growth in FY2027. Forecasting Delfi’s earnings to rise by 1.4% and 15.1% in FY2026 and FY2027, respectively, Tay reiterates his “hold” call at an increased target price of 92 cents, up from last November’s 81 cents.
Over the previous three years, Delfi’s gross margins have declined as cocoa prices increased. Based on Delfi’s statements, the decline in margins is due to multiple factors, including foreign exchange risks and higher marketing and raw ingredient costs. The company was able to pass on some of the cocoa cost increase, although not in full. As cocoa prices decline, analysts expect Delfi’s margins to recover and its profits to grow.
Shares in Delfi have gained around 21% since the start of 2023, closing at 94.5 cents on March 20.
Chocolate shrinkflation — happy investors, unhappy consumers
When cocoa prices rise, upstream and midstream players seem to be more price-resilient and able to pass on cost increases to their customers. Downstream firms, especially B2C businesses, may be less price-resilient, as competition is more intense at this stage of the value chain who may find alternatives and leave the brand in search of their sweet tooth fix.
