Cocoa is soaring to heights not seen in 44 years! What’s brewing in the world of chocolate, and how will it affect your sweet cravings?
In a world where a delicious piece of chocolate can make us happy, a serious issue is brewing in the backend: the cost of cocoa is at its highest point in 44 years!
This isn’t just a small price rise; it is a sign that something important is happening in the cocoa industry.
So, why have cocoa prices gone up so much? What does it mean for chocolate lovers like you and me, and what lies on the horizon for the commodity?
Let’s find it all out in today’s feature!
Let’s start from the numbers: On September 13, 2023, the benchmark cocoa contract at the Intercontinental Exchange in New York was trading at a record high, at a staggering $3,874 per tonne.
To make it easier to understand, this is nearly the highest it has been in the last 44 years. This big jump in cocoa prices has caused a severe cause of concern for chocolate lovers and a surprise for everyone else.
What is the Reason Behind The Rise in Cocoa Prices?
The culprit causing disruptions in the world of cocoa production is none other than El Nino. Let’s break down how this El Nino phenomenon affects cocoa production.
So, most of the cocoa production comes from the West African region. Unfortunately, it is dealing with its own set of challenges. Heavy rains and a troublesome disease called Black Pod are causing problems in this cocoa paradise.
In Ivory Coast, a big cocoa-producing country in West Africa, almost 20% of the cocoa crop is expected to be affected by heavy rains and a black pod disease.
Ghana, another cocoa-producing country in West Africa, is facing similar challenges. Their cocoa harvest for 2022-23 is expected to drop by a massive 24%, marking the lowest level in 13 years. Likewise, Nigeria is also experiencing a decline, with cocoa exports falling by 14% compared to the previous year.
But here is where things get really interesting.
The number of chocolate lovers is increasing. The demand for chocolates is rising, and the supply is struggling to keep up. Chocolate sales have increased impressively by 10% in the past year. And there is more to it – a report from Euromonitor, as reported by CNBC TV18, predicts a staggering 5.8% year-on-year growth in global chocolate demand for 2023.
You might think this surge in demand is good news for us chocolate lovers, right? Well, not really.
How Will It Affect Customers?
We are in a situation where the demand for chocolate is rising, but the supply is struggling to keep up.
To understand the seriousness of the issue, companies like Lindt, the Swiss chocolatier and confectionery giant, are taking action by stockpiling cocoa beans. They are trying to get ahead of the crisis. However, here is the catch: we can’t be certain if these stockpiles will be enough to weather the storm.
The consequences of these surging wholesale costs will likely be passed on to the consumers. Experts are warning that we might start feeling the impact in the latter half of 2023, according to WION. So, get ready because those days of larger chocolate bars at affordable prices might soon become a thing of the past.
Manufacturers are seriously thinking about either making their products smaller or raising the prices.
The cocoa industry is facing big problems, and the people who make chocolate and those who love eating it are unsure about what will happen next. The future of chocolate is a bit of a mystery, and we are all waiting to see how things turn out.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.