2024 Chocolate Prices Reach an Historical High
The chocolate industry has been witnessing an unprecedented
surge in cocoa beans prices now trading at all-time highs, sparked by a poor
harvest in Western Africa and concerns about the next crop.
Cocoa prices have surged 90% since the start of 2024.
Cocoa is expected to trade at 7910.61 USD/MT by the end of
this quarter, according to Trading Economics global macro models and analysts
expectations.
Looking forward, its estimated for it to trade at 9141.60
USD/MT in 12 months time.
What's caused this price surge?
Drier weather across West Africa, caused by the 2023 El Nino weather phenomenon, has resulted in poor harvests in both Ghana and Ivory Coast - the World's two biggest producers of cocoa beans, supplying some 70% of global cocoa beans.
The costs of other raw materials like Sugar, have also increased.
Whilst climate change might mean the UK now enjoys the climate for producing World class sparkling wines, the negative effects mean climate change has also impacted cocoa harvests with hotter temperatures and changing rainfall patterns, occurring in that small 'growing belt' - just 20 degrees North & South of the Equator, where cacao trees grow.
The poor harvests and low yields were also attributed to the effects of crop disease and ageing cocoa plants. Rising costs of pesticides and fertilizers made it difficult for cocoa farmers to afford them, which only added to the low yields though the prevalence of pests and disease.
The overall result is a drastic reduction in available cocoa at a time when, as a planet, we are consuming more cocoa than ever.
Although not a growing region, even the war in the Middle East has impacted on cocoa prices, as rebels attacked commercial shipping in the Red Sea, causing ships to take the longer route via the southern tip, and so increasing freight costs.
What have the Chocolate Producers said?
International Chocolatier, Callebaut were "applying an
allocation method to supply customers and were reserving the right to reject
orders due to capacity and shortage of product / cacao". This accounts for the out of stock
situations we have seen over the last few months.
UK Chocolatier Willie's Cacao, who have their own cocoa farms stated "The days of 2023 type pricing seem definitely to
be behind us, which in reality is a good thing for the farmers. Demand is
likely to continue to exceed supply globally, and many trees were lost in 2023
and so supply can’t quickly increase again".