Chocolate is getting more expensive as the global cocoa supply faces a shortage
Bad news for chocolate lovers.
This Easter season, consumers can expect a spike in prices for their favorite chocolate treats as cocoa prices have reached historic highs due to dwindling supply caused by climate change, according to a recent report from Wells Fargo.
As of last month, the world price for cocoa has more than doubled over the last year, breaking the previous record set in 1977, the report says. In two months, the global price for cocoa shot up over 75%, from $4,094 per metric ton on Jan. 8 to $7,170 on March 6.
Changing weather has threatened cocoa tree health and production, according to the report. Heavier rainfall last crop season caused an increase in diseases among cocoa trees. Now cocoa tree farmers in West Africa are facing dry temperatures and extreme winds from this year’s El Niño.
Cocoa trees are especially sensitive to climate change, only growing in a narrow band of approximately 20 degrees around the equator. The majority of global cocoa production is concentrated in the West African nations of Ghana, the Ivory Coast, Cameroon, and Nigeria.
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Cocoa prices have been steadily increasing as the supply has been gradually diminishing. This is the third year cocoa harvests are coming up short, the report said. Between October and February, cocoa shipments from the Ivory Coast were 32% lower than the same period the previous year.
The International Cocoa Organization projected the global cocoa supply deficit to increase by 405% from 2022/23 to 2023/24. As climate change only heightens the threat to cocoa production, prices will likely remain high through 2025, the report said.
The rise in prices “implies manufacturers will have to continue to raise prices” while lowering production, David Branch, Sector Manager with the Wells Fargo Agri-Food Institute and author of the report, told USA TODAY.
Branch also expects a decrease in demand from consumers, especially as people are already struggling to purchase daily necessities amid high inflation. “Luxuries like chocolate, which typically are impulse buys at the grocery or convenience store checkout, will suffer,” he said.
Candy companies are also adapting by shrinking the size of their chocolates or diversifying and reducing the cocoa ingredient in their products.
In a statement on Feb. 8, Michele Buck, President and Chief Executive Officer of Hersey, one of the world’s biggest chocolate companies, said that the company is expecting limited earnings growth this year due to the price increase, but "our strong marketing plans, innovation and brand investments will drive top-line growth and meet consumers' evolving needs."
Take its latest permanent Kit Kat bar flavor, for example. Called Chocolate Frosted Donut, this Kit Kat is only half-dipped in chocolate.
Kathleen Wong is a travel reporter for USA TODAY based in Hawaii. You can reach her at [email protected].