Cocoa prices are at an all-time high, how it will impact the chocolate industry? 

Chocolates turned bitter: Your Chocolates may not seem sweeter to you anymore, yes you heard it right. soaring prices of Cocoa in global market may cut your pocket as Cocoa prices in future markets have hit an all-time high of $11,000 per metric ton driven by crop failure in West Africa because of outbreak of a disease called black pod and swollen shot virus which devasted cocoa crop across Western Africa. global shortage of Cocoa is going to impact prices of chocolates in global market as well. 

Ghana, Côte d’Ivoire, Nigeria, and Cameroon are responsible for producing over 75 per cent of world's cocoa. It's a huge chunk of global cocoa supply! But lately, y've been facing some serious challenges. Droughts, fires, and or wear events linked to climate change have led to a significant drop in crop yields. It's a tough situation for se countries, especially considering how important cocoa is to ir economies.

European cocoa Association reported that number of beans processed for chocolate production fell by 2.5 per cent in first quarter compared to last year. And you know what's interesting? It's not because people are eating less chocolate, it's because re aren't enough beans to go around.

monthly report on cocoa market from International Cocoa Organization (ICCO) states that since season began cocoa arrivals at Ivorian and Ghanaian ports have decreased by 28 per cent and 35 per cent respectively, compared to same period next year. 

Earlier this year, Ghana Cocoa Board released a report predicting that country’s 2023– 2024 harvest would reach a maximum of 425,000 metric tons, a 22-year low. harvest is at a 22-year low and Cocoa prices have shot up at a 49-year high. 

According to JP Morgan, rise in cocoa prices is largely due to a global cocoa shortage. Climate change-induced drought has ravaged crops in West Africa, which contributes around 80 per cent of world’s cocoa output. According to International Cocoa Organization, global cocoa supply will decline by almost 11 per cent over 2023/2024 season.

Not So Sweet

rise in cocoa prices is going to have an impact on pricing. In international market, global chocolate brands Hershey and Mondelez International have shared ir plans to increase prices of chocolates across board as prices have surged by over 250 per cent in comparison to prices last year.  But are prices likely to come down? 

According to JP Morgan Research, prices of cocoa prices will remain elevated and y are expected to come down slightly over medium term, tracking around $6000 mark. But till time prices hover around an all-time high, pressure will be on companies to give it a pass through to its consumers. Reportedly,  Amul Chocolate is also eyeing a price hike of 10-20 per cent due to a rise in cocoa prices.