Chocolate prices set to rise thanks to record high cocoa prices

Thursday, 26 September 2024

Cocoa commodity prices had hit the highest levels in nearly 50 years.

Significantly-higher chocolate prices will likely hit shelves over the coming months and going into 2025.

The rise on prices would unfortunately be passed on to consumers.

A cocoa crisis is set to cause a sharp increase for already rising chocolate prices.

Cocoa commodity prices had hit the highest levels in nearly 50 years, peaking at nearly USD$12,000 per metric ton in the first half of 2024.

In the report Soaring Cocoa prices: The worst is yet to come, by food and agribusiness banking specialist, Rabobank, it found there was a “cocoa crisis”.

“Significantly-higher chocolate prices will likely hit shelves over the coming months and going into 2025, providing a major challenge for the chocolate sector, which is already battling a longer-term, structural decline in demand,” the report said.

RaboResearch analyst Paul Joules said the dramatic increase, fuelled by a global cocoa shortage, was primarily due to a disappointing harvest in West Africa, the source of 70% of the world's cocoa.

“The International Cocoa Organization (ICCO) reports a 14.2% drop in global cocoa production for the 2023/24 season, leading to a shortage of approximately 462,000 metric tons and the lowest cocoa stocks in 22 years.”

The rise on prices would unfortunately be passed on to consumers.

The retail price for 250g chocolate had already increased up to 20% compared to the same time last year, according to Stats NZ.

In May, Whittaker’s increased its chocolate prices for the third time in two years.

On Thursday a 250g block of Creamy Milk was $5.49 at Pak ‘n Save Mt Albert, $6.99 at New World Mt Roskill and $6.29 on special from $6.99 at Woolworths Mt Roskill.

“Chocolate manufacturers are struggling with soaring cocoa costs, which are reflected in higher local retail prices for chocolate,” Joules said.

Joules said despite recent increases, the full force of the cocoa crisis was likely yet to be felt on supermarket shelves globally.

“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,” he said.

“This would inevitably lead to higher prices for consumers, particularly for dark chocolates with higher cocoa content”.

To combat rising costs, Joules said chocolate manufacturers internationally were adopting various strategies.

“These include ‘shrinkflation’, which is reducing package sizes while maintaining prices, and ‘skimpflation’, which is altering recipes to use less cocoa and more fillers,” he said.

“These tactics, while effective, are often unpopular with consumers.”

According to Consumer NZ Jimbo’s cat food, LCM bars and Jimbo’s cat food had all fallen victim to shrinkflation.