A global cocoa shortage is being blamed for increased chocolate prices this Easter.
Prices are expected to continue to climb until 2025 thanks to several factors including rising inflation, production cuts and climate change.
Global cocoa production is expected to drop by almost 11% this year, according to the International Cocoa Organisation.
Here’s what you need to know.
Cocoa
Cocoa, the key ingredient in chocolate, has become increasingly expensive over the past few months.
Like gold or oil, cocoa is a ‘commodity’ — a resource bought or traded in large quantities via global markets. The value of a commodity is determined by benchmark prices, set by these markets.
Cocoa prices have more than doubled in the U.S. since January, from $US4,200 ($AU6,400) per tonne to almost $US10,000 ($AU15,300).
Why is cocoa more expensive?
Rabobank Group – a global food and agriculture bank – attributed global cocoa supply shortages to “adverse weather conditions, ageing trees, and disease in crops”.
For example, recent El Niño weather patterns have been blamed for limiting crop growth in Côte d’Ivoire and Ghana. More than half the world’s cocoa is grown in the West African nations.
Rabobank analyst Pia Piggott said global trade regulations could also be making it harder for growers to meet environmental and ethical standards.
Australian chocolate prices
Rabobank’s analysis shows chocolate prices in Australia have increased by 8.8% since last Easter.
It means the retail cost of chocolate is increasing at double the rate of broader inflation (rising prices) which is 4.1%.
Despite prices for some food products beginning to ease after high inflation in 2023, Piggott said chocolate prices here in Australia and around the world are expected to remain high.
The high cost of cocoa has prompted some manufacturers to reduce the size of their products whilst keeping the price the same — a trend known as “shrinkflation”.
For example, fewer or smaller chocolate eggs in a packet.
Consumer advocate group CHOICE has called for retailers to be more transparent about shrinkflation, so customers know when a product has changed.
Response
Swiss chocolatier Lindt said: “The world market price for cocoa has been rising continuously since the end of 2022.” It warned customers that its prices will increase in 2024 and 2025.
One of Australia’s biggest chocolate brands, Cadbury, said ingredients including cocoa have reached “record high prices”.
A Cadbury spokesperson told TDA: “We understand the economic pressures that consumers continue to face,” as it works “to absorb these continuing cost increases where possible”.
