By Neal Freyman
The global chocolate industry is facing its worst crisis since Johnny Depp played Willy Wonka. Demand for chocolate is vastly outweighing the available cocoa supply, leading to skyrocketing cocoa prices that will inevitably make chocolate treats more expensive in supermarkets around the world.
The price chart for cocoa is something your algebra teacher would use to describe the term “exponential.” On Friday, benchmark cocoa futures surged to a record $8,018 per metric ton, a 25% increase last week alone and 215% higher than last year.
The price spike has caused large African cocoa processors—which take raw cocoa and turn it into something usable for chocolate companies—to slash production, since they can no longer afford to buy beans.
Why are cocoa prices so high?
The first thing you need to know about cocoa trees is that they only flourish in a narrow band around the equator, which is why four West African countries (Ivory Coast, Ghana, Cameroon, and Nigeria) produce almost 75% of the globe’s cocoa supply, according to Bloomberg Opinion’s commodity expert Javier Blas. Ivory Coast alone produces nearly half of the world’s cocoa, Reuters notes.
Due to bad weather, bean disease, and a lack of investment in new trees stretching back decades, recent cocoa harvests have been dreadful, resulting in a yawning gap between supply and demand.
- The cocoa market will be short 374,000 tons this season, up from a shortfall of 74,000 tons last season, according to the International Cocoa Organization.
- Of course, supply is only one side of the price equation: As chocolate has transitioned from a luxury item to one you can easily pick up before catching a movie, global demand has doubled in the last three decades, Blas notes.
Does this mean chocolate could get more expensive?
Actually, it already has. Prices for chocolate products at US retail stores grew 11.6% in 2023 compared to the previous year, according to market research firm Circana. And going forward, confection companies Hershey and Cadbury-maker Mondelez warned they’ll have no choice but to pass on higher cocoa costs to consumers.
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service. The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components
