Cocoa, the commodity that spent two years wrecking chocolate margins and candy budgets, has collapsed. Futures that peaked near $13,000 a metric ton at the end of 2024 were trading around $5,327 a ton in late July, down 34 percent over the past year alone, and other trackers put spot prices closer to $3,300 to $4,200 a ton this spring — a fraction of the panic-era high. On top of that, the Trump administration exempted cocoa, coffee, and several other agricultural imports from reciprocal tariffs in a November 2025 executive order, retroactive to the date it took effect. Two of the three forces that made Halloween candy expensive in 2025 — the shortage and the tariff — have both substantially reversed. The conventional read, and the one every retailer would love to run this October, is that chocolate is finally coming back down to earth in time for trick-or-treating.
It isn't, and the reason it isn't has already been tested twice this year.
Valentine's Day 2026 was the first test. Cocoa had already fallen sharply from its record highs by February, yet a king-size two-pack of Reese's hearts that had jumped 13 percent the year before rose another 12 percent, to $2.89 at Target. Hershey's own CEO, Kirk Tanner, told investors the company's price increases still weren't covering its cocoa cost inflation, even as easing cocoa markets meant the pressure to raise prices further was letting up. In his words, the deflation in cocoa "takes future pricing pressure down" — a comment about the trajectory of future increases, not a promise of relief on what's already on shelves.
Easter 2026 was the second test, and it failed the same way. By April, cocoa had dropped to roughly $3,300 a ton, down from over $12,000 at its late-2024 peak — a decline of more than 70 percent. Chocolate prices did not follow it down. Datasembly data showed chocolate costing shoppers about 14 percent more year over year that spring, and government inflation data showed candy prices overall up 11.6 percent versus the year before. Wells Fargo Agri-Food Institute sector manager David Branch explained the gap the same way economists explain sticky prices in any input-cost cycle: the chocolate on shelves right now was manufactured using cocoa that companies bought and locked in months earlier, at or near the top of the market, through forward contracts and hedges. The input cost crashing in the futures market doesn't change what a company already paid for the beans sitting in its inventory. Margin relief only shows up once that expensive, already-purchased cocoa works its way fully through the system — and confectioners have been careful about how fast they let that happen.
That carefulness has a name in commodity and retail economics: price retention. When a company raises prices during a genuine cost shock, some of that increase tends to stick around even after the input cost that justified it goes away, because giving it back means giving up margin the company has gotten used to booking. Hershey and Mondelez both leaned hard on pricing to protect earnings through the 2024–2025 cocoa spike, and both have told investors they remain hedged above where the futures market sits today — meaning their own purchase costs, on paper, are still elevated relative to spot prices, which gives them cover to hold retail prices where they are rather than cut them. Branch himself put a number on the hope rather than a guarantee, telling Axios that consumers might start seeing lower chocolate prices later in the year, "hopefully in time for Halloween." That's an analyst's optimism, not a company's plan. Nothing in the way Hershey or Mondelez has talked to shareholders this year suggests either company intends to be the one that moves first on giving cocoa's crash back to the candy aisle.
There's a second layer to why prices won't fully reset even if a company wanted them to: the tariff relief is narrower than the headline suggests. The November exemption applies to raw cocoa beans, nibs, liquor, butter, and powder entering the U.S. — the upstream ingredient. It does not extend to finished chocolate products imported from the European Union, which still face a 15 percent tariff. A meaningful share of premium and specialty chocolate sold in the U.S. is finished abroad, not domestically manufactured from raw cocoa, so the tariff relief that made headlines in November doesn't touch that portion of the shelf at all. The "tariffs got lifted" framing is true for the commodity input and false for a chunk of the finished product category, and retail pricing doesn't distinguish between the two for the shopper standing in the candy aisle.
Then there's the restructuring that already happened and won't unwind on its own. During the worst of the shortage, manufacturers didn't just raise prices — they changed what they were selling. Hershey adjusted what it calls "price pack architecture," shrinking the amount of chocolate per package rather than raising the sticker price as visibly. Both Hershey and Mondelez expanded gummy and cocoa-free product lines, effectively building out permanent manufacturing and marketing infrastructure around cheaper inputs. Circana data showed chocolate's share of Halloween candy sales slide from 52 percent to a smaller share last year as shoppers shifted toward those alternatives. None of that infrastructure gets torn down just because cocoa futures fell. A company that spent a year building out gummy production lines, negotiating shelf space for smaller-format bars, and training consumers to accept less chocolate per dollar has no commercial reason to reverse course the moment its cocoa costs improve — particularly when, as Mondelez's own executives have acknowledged, price increases already tested the limits of what U.S. shoppers would tolerate before volume started to suffer.
The forward-looking risk compounds the caution. Analysts are now forecasting a global cocoa surplus for the current and coming season, a sharp reversal from the deficits of 2023 through 2025 — but industry trackers are also flagging a confirmed El Niño weather pattern for 2026 and 2027 as a genuine downside risk to that surplus. West Africa's structural vulnerabilities — aging cocoa trees, thin farmer incomes, and high exposure to a single bad rainy season — haven't gone anywhere. Confectioners who got burned holding prices too low through the last extreme weather cycle have every incentive to keep a pricing buffer in place against the next one, rather than declare victory and cut prices into an uncertain 2027 harvest.
Put all of that together and the Halloween 2026 pricing story isn't really about cocoa or tariffs at all anymore — both of those inputs have already delivered the relief a conventional read would expect. It's about what happens after an industry successfully raises prices during a real shock: very little incentive exists to lower them back down, especially when the companies involved are still working through higher-cost hedged inventory, still exposed to a tariff on finished imports that never went away, and still sitting on new product lines built specifically to profit from smaller portions and cheaper ingredients. Shoppers filling Halloween baskets this October should expect a candy aisle that looks a lot like the one from last year — chocolate priced roughly where it's been, gummies and sour candy occupying more shelf space than they did two years ago — regardless of what the futures market did in the meantime.
