FoodCocoa crisis: Prices soar, affecting chocolate to cosmetics

Cocoa crisis: Prices soar, affecting chocolate to cosmetics

Cocoa prices are going up. Poles will feel it soon.
Cocoa prices are going up. Poles will feel it soon.
Images source: © Getty Images | VLG

6:34 AM EDT, May 1, 2024

It is disheartening news from the market: cocoa prices are hitting an all-time high. This surge is primarily due to its shortage, which is expected to affect the prices of many cocoa-derived products. Consequently, we might see an increase in costs for chocolate and other items produced from cocoa beans, including cosmetics and pharmaceuticals.

Cocoa is significant in the food industry, most commonly associated with sweets and the cherished powdered cocoa that children frequently enjoy in milk for breakfast or dinner. However, the valuable white beans harvested from the cocoa tree have a broad spectrum of uses beyond initial expectations. They are essential in creating the chocolate coatings we love on our cakes.

Some cosmetics, including creams and even soaps, benefit from including cocoa in their formulas. Given the beans’ numerous health benefits, it's unsurprising that the pharmaceutical industry also takes advantage of them.

Cocoa prices are soaring – and there's more to come

Bad news for cocoa product enthusiasts: according to experts from UCE RESEARCH and WSB Universities' Merito, the price of a ton of cocoa on the global market has reached an unprecedented level of $11,000. This record high is only the beginning, as estimates suggest the price could climb to 12-13 thousand dollars and, in the worst-case scenario, even hit $15,000.

A retail market expert from the Offerista Group explains that the main cause of this increase is the bleak outlook in the largest cocoa-producing regions, especially in Africa. Local farmers expect a significantly reduced yield this year, largely due to drought.

The four African countries of Ghana, Ivory Coast, Nigeria, and Cameroon contribute 70 percent of the global cocoa supply. Unfortunately, the region's changing climate, characterized by droughts, heavy rainfall, and strong winds, is detrimental to cocoa production. Other producing countries, like Ecuador and Brazil, cannot compensate for the shortage quickly. Many farmers, facing unprofitable returns and poverty, abandon cocoa cultivation, significantly impacting their livelihood and global cocoa prices.

Sweet prices are on the rise

The ramifications of the escalating cocoa prices are already evident. Experts note that in March of this year, sweets and desserts were among the top three categories to witness the most significant price hikes from 17 monitored groups. Their prices increased by 9.6% year-over-year. Specifically, the price of a chocolate wafer shot up by 30.7%, while a chocolate bar now costs 16.8% more. According to a recent cocoa price report, further increases are anticipated to occur in the third or fourth quarter of the year, heavily dependent on the harvest's outcome.

Related content