September 30th 2024.
According to a new report by Rabobank, the world may soon be facing a "cocoa crisis" that could result in higher prices for chocolate. This specialized bank in food and agriculture has predicted that chocolate prices will significantly increase in the next few months and continue to rise until 2025.
RaboResearch analyst Paul Joules explains that cocoa commodity prices have reached their highest point in almost 50 years, peaking at nearly US$12,000 per ton in the first half of this year. This surge is mainly due to a disappointing cocoa harvest in West Africa, which supplies 70% of the world's cocoa. The International Cocoa Organization reports a 14.2% decrease in global cocoa production for the 2023-24 season, resulting in a shortage of 462,000 metric tons and the lowest cocoa stocks in 22 years.
Although retail prices have already begun to rise, the full impact of this shortage has yet to hit supermarket shelves. Joules notes that due to the delay in the supply chain and existing contracts, the most significant price hikes will be seen in the second half of 2024 and into 2025. This will particularly affect dark chocolate with higher cocoa content.
To cope with the rising costs, chocolate manufacturers are implementing various strategies worldwide. These include "shrinkflation," which involves reducing package sizes while maintaining prices, and "skimpflation," which alters recipes to use less cocoa and more fillers. However, these tactics are not always popular with consumers.
Joules also predicts that shoppers will need to change their purchasing habits in response to these price increases. He believes that the higher cost of chocolate will lead to a significant drop in consumer demand, which should eventually balance out the cocoa shortage and stabilize prices. For the western European market, a decline in chocolate sales of 5-9% is expected, with this trend becoming more evident in 2025.
In recent years, there has been a noticeable decrease in the consumption of sweets, and Joules states that this is a "structural" shift rather than a temporary trend. He believes that the current cocoa crisis will only add to the challenges and make a significant growth in the chocolate market unlikely in the near future.
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