‘Have to increase’: Chocolate prices set to spike as cocoa supplies drop

Chocolate lovers could be facing a possible nightmare, as global cocoa supplies hit their lowest level in two decades – driving prices to a record high.

Chocolate lovers could be facing a possible nightmare ahead of the silly season, as global cocoa supplies hit their lowest level in two decades – driving confectionary prices to a record high.

Ongoing inclement weather and crippling crop diseases in West Africa – where most of the world’s cocoa bean is grown — coupled with economy-wide pressures like rising labour, packaging and energy costs, have caused headaches for the industry in recent months.

But “the worst is still yet to come for consumers”, market analyst Rabobank’s Paul Joules told The Sydney Morning Herald, as the stockpiles of cocoa manufacturers have been relying on for the past 18 months run out.

“While hedging has protected many manufacturers from the worst effects of the price rises until now, eventually all these forward contracts will get used up, and prices will have to increase to reflect the current cocoa price,” Rabobank’s Soaring chocolate prices report, released last week, read.

The high price sting is one manufacturers will no doubt pass onto consumers, Rabobank warned.

Chocolate lovers could be facing a possible nightmare ahead of the silly season. Picture: Dan Kitwood/Getty Images

Given the high concentration of cocoa it contains, dark chocolate costs will be the hardest hit.

Analysis by Mr Joules found that, worldwide, a 100 gram block of chocolate with 70 per cent cocoa content could rise from $4.90 to $6.50.

A “similar increase could be expected in Australia”, he said.

According to Consumer Price Index data, year-on-year inflation in snacks and confectionary is 4.6 per cent, while Rabobank found the cumulative price of chocolate rose 22 per cent between June 2022 and June 2024.

Rabobank warned that companies will likely shrink the size and cocoa content of their products to maximise profits.

Year-on-year inflation in snacks and confectionary is 4.6 per cent, according to consumer price index data. Picture: Dan Kitwood/Getty Images

Earlier this year, Saxo Head of Commodity Strategy, Ole Sloth Hansen, also raised concerns the ongoing supply issues could cause a decline in chocolate quality.

“It can take anywhere from six to 12 months for … price hikes to be reflected in the retail pricing of products,” Mr Hansen said.

“The trend of shrinkflation is likely to become more pronounced.

“Consequently, while there might not be a stark rise in the price tags of chocolate items, the quantity offered for the same price

Originally published as ‘Have to increase’: Chocolate prices set to spike as cocoa supplies drop