( CNN ) -- This year 's African cocoa harvest , which has just gotten underway , is looking bright . Warm weather is leading many to expect a bumper crop for the main harvest . But a number of problems in the Ivory Coast , the world 's largest producer of cocoa beans , are casting a cloud over the longer-term supply outlook and leading to increasing volatility in cocoa prices , experts say . For years , the Ivory Coast , which accounts for 35 percent of the world 's supply of cocoa , the main ingredient in chocolate , has been the lifeblood of international chocolate manufacturers . According to the International Cocoa Organization , the Ivory Coast , officially known as Cote d'Ivoire , produced 1.2 million tons of cocoa in 2009-2010 . Its annual output is nearly double that of its closest rival , Ghana . But in recent years , the West African nation has been struggling with production growth as a host of challenges -- from political strife to disease -- have threatened supplies . `` All analysts are looking into what 's going on in the country , '' Laurent Pipitone , senior statistician at the International Cocoa Organization , told CNN . `` If you know what 's happening in Cote d'Ivoire , you already have a rough idea of the global situation . '' The last 10 years have seen cocoa crops in the Ivory Coast flat-line , while consumers ' insatiable appetite for chocolate has increased . ( In three of the past four years , world cocoa supply has failed to keep up with demand . The exception was in 2008-2009 , when the economic downturn curbed demand . ) Farmers in the Ivory Coast are still struggling with political instability . The country was split in two following a civil war in 2002 -- the south is controlled by the government while rebels control the north . According to William Guyton , president of the World Cocoa Foundation , this has delayed much needed reinvestment in the sector . `` One of the major reasons for declining yields on farms is the number of aging trees , '' he said , adding that there are n't enough supplies , such as fertilizers , available to farmers . There are also problems with pests and diseases , namely black pod , a fast spreading fungal disease that causes cocoa pods to blacken and rot . A third of the global cocoa crop is lost to diseases annually . Limited access to credit , as well as a shift among Ivorian farmers away from cocoa to more reliable crops such as rubber , or to jobs in the city , are additional challenges facing production , industry watchers say . Doubts about the Ivory Coast 's cocoa production have led to increasingly volatile cocoa prices . `` If there 's a bad cropping season , if there 's an insect pest or fungal disease that goes through the Ivory Coast , that can impact the whole market , '' Guyton said . Recently , the market has attracted speculators who , betting that prices will rise , buy up cocoa stocks and store them to sell later . In a headline-generating move , London based hedge fund Armajaro took delivery of 240,100 tons of cocoa in July . That order accounted for around 7 percent of annual global production and caused cocoa prices to rise to their highest level in more than 30 years . The upward trend in cocoa prices has affected consumers , to a degree . In the past two to three years , most chocolate companies have increased their prices , '' Pipitone from the International Cocoa Organization said . But , he added , the chocolate sector is quite competitive so firms have been looking for ways to avoid passing on rising input costs to their customers . `` Companies do n't want to lose market share , so there are some who have reduced the size of their chocolate portions to limit the price increase . Some have also changed their chocolate recipes , using less cocoa . '' Pipitone does n't expect any substantial increase in chocolate prices in the near term . `` This year and the next few , we do n't need to be concerned that our chocolate bars will increase in price , '' he said . But he warned , further down the line there are key concerns supplies will not meet demand -- a problem the industry is trying to address by diversifying its supply away from the Ivory Coast and other West African nations and into countries such as Indonesia and Vietnam .
The Ivory Coast is the world 's top supplier of cocoa , producing 35 percent of global supplies . It also has a long history as an exporter of palm oil and other tropical products such as coffee and bananas. Political instability has delayed investment in the Ivory Coast 's cocoa industry . Other challenges include lack of credit and a shift among Ivorian farmers away from cocoa to more reliable crops .