Cocoa price surge threatens chocolate and confectionery industry
This is disheartening news from the market. Cocoa prices are hitting records! It's all due to its shortage, which will surely reflect on the prices of many products. We might pay more not only for chocolate but also for other products made from cocoa beans, such as cosmetics and pharmaceuticals.
30 April 2024 19:16
Cocoa is widely used in the food industry. We primarily associate it with sweets and the popular, powdered cocoa dissolved in milk that children drink in abundance for breakfast or dinner.
However, the white beans found in the fruit of the cocoa tree have a very wide range of applications after initial processing. The raw material is used, among other things, to produce a chocolate cake coating. Some cosmetics, such as creams, contain cocoa. Even soaps are enriched with cocoa butter. The beans have many health properties. Therefore, it's unsurprising that the pharmaceutical industry also benefits from them.
Cocoa prices are on the rise. And that's not the end
For fans of products made from cocoa, we have bad news. As reported by experts from UCE RESEARCH and WSB Universities Merito, the price of a ton of cocoa on world exchanges reached a record level of £8,700. That's not the end, as it is estimated that this value will exceed £9,500 to £10,500, and in the worst case, even £11,900. What's the reason for this?
A retail market expert from Offerista Group says that the primary reason is that the situation in the largest producer markets, mainly in Africa, has no chance of improvement. Local farmers report that this year's harvest will be very poor, mainly due to the drought.
Four African countries (Ghana, Ivory Coast, Nigeria, and Cameroon) account for 70 percent of the world's production of raw materials. Unfortunately, the dynamically changing climate in these droughts, heavy rainfall, and strong winds do not favour the crops. Other producers, such as Ecuador or Brazil, cannot suddenly increase the amount of cocoa on the market. Moreover, farmers who cannot maintain cocoa crops change their unprofitable engagement.
These are often people living on the edge of poverty, so for them, it's a matter of life and death for them and their families. All this will affect the rise in cocoa prices.
Sweet prices are already rising
The problems resulting from the price of cocoa are already visible to the naked eye. Experts indicate that in March this year, sweets and desserts were among the three categories with the highest price increases out of 17 monitored. Their prices went up by 9.6% year-on-year.
For example, the price of a chocolate wafer jumped by as much as 30.7%, while a bar costs 16.8% more. The report's authors on cocoa prices claim that further price increases can be expected in this year's third or fourth quarter. It all depends on the harvest.
