"The worst is still yet to come": Grim warning for chocolate lovers
Chocolate lovers could be facing a potential nightmare ahead of the festive season as cocoa supplies hit an all time low, driving confectionary prices to a record high.
Most of the world's cocoa beans are grown in West Africa, where ongoing inclement weather and crippling crop diseases, coupled with economy-wide pressures like rising labour, packaging and energy costs, have put unprecedented pressure on the chocolate industry in recent months.
However, market analyst Rabobank’s Paul Joules told The Sydney Morning Herald, “the worst is still yet to come for consumers”, as the stockpiles of cocoa that manufacturers have been relying on for the past 18 months have 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.
Rabobank wanted that the increased costs of manufacturing will be passed down to consumers, with dark chocolate lovers being the most affected due to the high concentration of cocoa.
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, with a “similar increase could be expected in Australia”.
“It can take anywhere from six to 12 months for … price hikes to be reflected in the retail pricing of products,” Saxo Head of Commodity Strategy, Ole Sloth 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 will see a reduction.”
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