Skyrocketing cocoa prices are putting pressure on chocolate producers worldwide, with consumers likely to bear the brunt in the coming months, according to Rabobank’s latest report.
The report Soaring Cocoa Prices: The Worst is Yet to Come highlights how cocoa commodity prices have reached their highest level in nearly 50 years.
Paul Joules, research analyst for Rabobank, said the surge is driven by a poor harvest in West Africa, which supplies 70 per cent of the world’s cocoa.
“Cocoa futures peaked at nearly US$12,000 per metric ton early last year,” he explained. “The International Cocoa Organisation (ICCO) reported a 14.2 per cent drop in global production for the 2023/24 season, resulting in a shortage of 462,000 metric tons – the lowest cocoa stocks in 22 years.”
Despite recent price increases, Joules said the cocoa crisis has yet to impact supermarket shelves, but the steep price increase is anticipated to be felt later this year and into next.
“This would inevitably lead to higher prices for consumers, particularly dark chocolates with higher cocoa content,” he added.
To manage rising costs, chocolate manufacturers resort to strategies such as shrinkflation (reducing package sizes while maintaining prices) and ‘skimpflation’ (using less cocoa and more fillers).
“These tactics are often unpopular with consumers but necessary given the circumstances,” said Joules.
Rabobank projects a decline in chocolate volumes – particularly in Western Europe – where demand could fall by mid-single digits next year.
