
Chocolate prices expected to increase after a global hike in cocoa costs
- Published By Jedida Barasa For The Statesman Digital
- 1 year ago
Global cocoa prices have hit a fresh record high as dry weather hurts crops in West Africa. Cocoa prices on the New York commodities market reached a new all-time high of $5,874 (Sh933,848.52) a tonne on Thursday.
The cost of the key ingredient for making chocolate has now roughly doubled since the start of last year. Soaring cocoa prices are already filtering through to consumers and squeezing major chocolate makers.
On Thursday, one of the world’s biggest chocolate manufacturers Hershey warned: “Historic cocoa prices are expected to limit earnings growth this year.”
The company’s chief executive Michele Buck also did not rule out putting up prices for customers.
“We can’t talk about future pricing,” she said in a call with analysts but added, “given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business.”
With Valentine’s Day buying surge approaching, signs are consumers could be staring at higher prices for their sweet treats soon. Many consumers are already dealing with higher prices for several everyday items, due to inflation still being somewhat high.
Buck’s comments came as Hershey announced its financial results for the three months to December 31. The figures showed sales fell by 6.6 per cent as inflation-hit consumers cut back spending on confectionery. Last month, Mondelez, the company behind the Cadbury brand, identified rising costs of ingredients as one of the challenges it faced in the year ahead.
Chief financial officer Luca Zaramella said the firm had seen “significant increases in both cocoa and sugar”.
In December, UK consumer group Which? said the price of some festive chocolate boxes had risen by at least 50 per cent in a year. While overall inflation for UK supermarket food and drink eased in November to 8.3 per cent, the rise in the chocolate prices was significantly higher at 15.3 per cent.
Cocoa prices have been driven up by poor harvests in West Africa, which produces the bulk of global supply.
The El Niño weather phenomenon has been causing drier weather in Ghana and Ivory Coast, which are the world’s two biggest producers of cocoa beans.
Hotter temperatures and shifts in rainfall patterns caused by climate change can also have an impact on harvests.
“Traders are worried about another short production year and these feelings have been enhanced by El Niño that is threatening West Africa crops with hot and dry weather,” said Jack Scoville, an analyst at Price Futures Group.
According to experts, Cocoa is extremely vulnerable, as it is very sensitive to any kind of weather changes, especially warmer weather. Hotter and drier weather can also bring diseases to the crops causing a poor harvest and potentially having long-term effects on the quality of the farming land.
Share on
Tags
SHARE YOUR COMMENT
MORE STORIES FOR YOU
Trending Stories
DJ Mo’s former illicit lo...
- Published By Jane
- January 15, 2024
Mapenzi! Zari and Tanasha...
- Published By Jane
- October 24, 2023
Zuchu Speaks on Diamond P...
- Published By Jane
- October 12, 2023
Hio Ni Upumbavu Wasituche...
- Published By Jane
- November 8, 2023
RECOMMENDED FOR YOU
Love Without Likes: Why P...
- Published By The
- July 17, 2025
Revealed: Inside The Secr...
- Published By The
- July 17, 2025
What is The Difference Be...
- Published By The
- July 21, 2025
The 5 Challenges and Solu...
- Published By The
- July 17, 2025
Latest Stories
What Really Happened?: Wo...
- Published By The
- August 12, 2025
Singer Jovial Opens Up Ab...
- Published By The
- August 12, 2025
Nairobi Hospital Halts Pr...
- Published By The
- August 12, 2025
Shock as Parcel With Thre...
- Published By The
- August 12, 2025