faq
Crop failures and falling supply are driving global cocoa prices from one record to the next. Chocolate lovers in this country could also feel this. Are the Easter bunnies getting more expensive now?
How has the price of cocoa developed?
The price of a ton of raw cocoa has been rising from record high to record high for months. On the raw materials exchange in London it has climbed above the 5,000 pound mark in the past few days; a ton currently costs just under 5,600 pounds. In the last twelve months alone, the increase is more than 160 percent.
Last year, cocoa showed the strongest price increase among exchange-traded raw materials, with an increase of around 70 percent, write the relevant experts at Commerzbank in an analysis. Many market observers are of the opinion that prices will continue to rise in the coming months. For consumers, this means that they also have to prepare for rising prices for cocoa products.
What role does climate change play?
Experts explain the price jump with supply problems caused by exceptional weather conditions: the supply of cocoa is becoming increasingly scarce and, according to experts, climate change is having a significant impact on cultivation. According to the environmental organization WWF, more frequent extreme weather events such as long periods of drought, heavy rain and floods have damaged the quality of cocoa, reduced yields or completely destroyed harvests.
“In many areas, cocoa cultivation only has a future if the necessary measures to adapt to climate change are taken in a timely manner and a switch is made to resilient, sustainable cultivation systems,” says Kerstin Weber, environmental scientist at WWF. The raw materials experts at Commerzbank expect that the cocoa market will also have a supply deficit in the current 2023/24 crop year, which would be the third in a row.
Where is the most cocoa grown?
Around 60 percent of the world’s cocoa is produced in the two most important producing countries, Ghana and Ivory Coast. Ivory Coast is the world’s largest cocoa producer. Both countries are currently struggling with serious harvest problems. Industry insiders expect that production in Ghana could fall by around 40 percent this harvest season. And Ivory Coast reported that 32 percent fewer cocoa beans arrived at its ports in February than in February of the previous year.
In addition to the weather phenomenon, there are also other reasons for the declining supply. On the one hand, the harvest is affected by plant diseases. Longer periods of rain lead to the spread of CSSVD. The virus, spread by aphids, causes cocoa trees to die.
According to Weber, 17 percent of all cultivated areas in Ghana are already affected, and CSSVD is also spreading to Ivory Coast. Since cocoa trees are not resistant, the only effective treatment is to cut down infected trees and plant new ones, says the WWF expert.
What does this mean for consumers?
The sharply increased prices are likely to be well received by consumers, as the prices for the production of chocolate products naturally depend on the price of raw materials. Increased cocoa prices have made the production of Easter eggs more expensive, writes Jeremy Naylor, analyst at broker IG.
Of course, many people in this country are also affected by this: according to the Federal Association of the German Confectionery Industry (BDSI), the annual per capita consumption of chocolate products in Germany was 9.3 kilos in 2023.
The confectionery industry has long been complaining about the sharp rise in costs. According to the BDSI, EU sugar was 72 percent more expensive in 2023 than in the previous year, cocoa butter increased by 52 percent and cocoa by 43 percent. The most recent price developments are not yet completely included in these calculations.
“A kilo of cocoa is almost three euros more expensive than it was a year ago. Everyone can calculate for themselves what this means for the production costs of a 100 gram chocolate bar, which contains between 35 and 70 percent cocoa, but we are currently assessing the situation as a whole “, a spokesman for the chocolate manufacturer Ritter Sport comments on the current situation.
How are the manufacturers reacting?
It is still unclear from the manufacturers what the reaction to the increased cocoa prices will be. Food companies such as Mondelez (“Milka”) simply say that setting end consumer prices is the responsibility of food retailers.
The Swiss food company Nestlé is not ruling out further price increases due to more expensive raw materials such as cocoa and Robusta coffee, as German boss Alexander von Maillot recently said.
Retailers are also cautious when it comes to prices. For competitive reasons, we don’t want to say anything about this or the negotiations with manufacturers. Global demand is significantly greater than supply, says a spokesman for the Rewe supermarket chain. However, it cannot be inferred per se that chocolate or products containing cocoa are becoming more expensive. The reasons are the intense price competition, ongoing contracts, manufacturers’ stockpiling and the actual cocoa content.
Are Easter bunnies and Easter eggs getting smaller?
IG expert Naylor gives an indication of the possible consequences of the price increase: In order to cope with this price increase, some companies that produce Easter eggs could decide to make the eggs smaller. “That way they can still sell them at a price that people can afford,” said Naylor. This is called “shrinkflation”. “So if you buy Easter eggs this year, don’t be surprised if they are smaller than usual,” he notes.
Armin Valet, food expert at the consumer advice center, can also imagine that the classic table will become smaller. Valet has been studying products that shrink while prices remain the same or increase for years. Most recently, a lot of sweets ended up on his list. “Manufacturers and retailers know that consumers pay less attention to the price of luxury products such as chocolate. That’s why they are particularly keen to increase prices,” says Valet.
And he notes that in the past, chocolate has regularly become more expensive, even without rising raw material prices. “A good 20 years ago the table cost 99 pfennigs, currently 1.49 euros. So the price has tripled.”