Chocolate prices are expected to surge over the coming months, with economists warning that the worst of an international cocoa shortage is “yet to come”.
Cocoa prices have hit a 50-year high, according to new data from Rabobank Group — a global food and agriculture bank.
Its latest report said, “significantly higher chocolate prices” were likely to hit shelves in the months ahead, “and going into 2025” with prospects of a cocoa shortage.
Rabobank noted consumers should expect higher prices and reduced package sizes.
Cocoa
Cocoa is the key ingredient in chocolate. Like gold or oil, it’s a ‘commodity’— a resource bought or traded in large quantities via global markets.
Further, the value of a commodity is determined by benchmark prices, set by these markets.
Cocoa prices have more than tripled in the U.S. since January, from $US4,200 ($AU6,400) per tonne to almost $US12,000 ($AU18,800).
So, why has cocoa gotten so much more expensive this year?
Cocoa shortage and increasing chocolate prices
Global cocoa production fell by 14.2% for the 2023/24 season.
This then led to a shortage of “approximately 462,000 metric tons and the lowest cocoa stocks in 22 years,” Rabobank research analyst Paul Joules said.
Joules noted this was “primarily due to a disappointing harvest in West Africa, the source of 70% of the world’s cocoa.”
Rabobank said “soaring cocoa costs,” for manufacturers were also being “reflected in higher local retail prices for chocolate.”
Australia
In March, Rabobank found that Australian retail chocolate prices were up 8.8% on the previous year.
‘Snacks and Confectionery’ prices rose by 5.2% for the year to August 2024. This is according to the latest Australian Bureau of Statistics inflation data
Last month, Cadbury announced it was doubling the ‘recommended retail price’ of its popular Freddo Frog and Caramello Koala products.
The manufacturer blamed the price increase on “the record global price of cocoa and increased input costs.”
‘Shrinkflation’
The high cost of cocoa has prompted some manufacturers to reduce the size of their products whilst keeping the price the same. This is a trend known as ‘shrinkflation’.
Rabobank said chocolate manufacturers may also look to alter their recipes to “use less cocoa and more fillers,” — this is known as ‘skimpflation’.
Consumer advocate group CHOICE has called for retailers to be more transparent about shrinkflation. This would ensure customers know when a product has changed.
2025
Rabobank warned “the full force” of the cocoa shortage and its impact on supermarket shelves could be yet to come.
“Due to the lag in the supply chain and existing contracts, the steepest price hikes are anticipated in the second half of 2024 and into 2025,” Joules said.
“This would inevitably lead to higher prices for consumers, particularly for dark chocolates with higher cocoa content.”
