Chocolate prices increase as Cocoa crops enter the climate

Image Courtesy Francis Kokoroko/Reuters

Chocolate price hikes

(The Post News) Chocolate lovers are facing challenging times as prices surge due to a growing crisis in West Africa’s largest cocoa bean producers, the Ivory Coast and Ghana, which together supply 70% of the world’s cocoa.

A combination of factors, including widespread illegal gold mining, climate change, mismanagement within the sector, and the rapid spread of disease, are responsible for the current situation. This crisis is not only impacting the chocolate industry but also local and global economies.

“This has been a nightmare waiting to happen,” said Amarachi Clarke, the owner of a chocolate brand called Lucocoa in London. “When we talk about chocolate,” she added, “how often do you hear the words ‘climate change’ or ‘living income’ or ‘lack of investment’? But all these things are starting to come to a head now, and we’ve got a huge problem.”

El Niño has caused significant damage to cocoa production in West African regions as unpredictable rainfall and rising temperatures are leading to drought conditions, hindering the development of the plants.

The December 2023 bout of El Niño led to excessive moisture, resulting in the proliferation of black pod disease and causing the plants to decay. The overall precipitation in West Africa surpassed twice the 30-year average for that period. Black pod disease is a fungal infection caused by the fungus Phytophthora spp., which attacks the pods, causing them to rot.

These climate changes are exacerbating the spread of pests and diseases, posing challenges for farmers trying to achieve high cocoa yields. Approximately 590,000 hectares (equivalent to 1.45 million acres) of cocoa plantations have been affected by the swollen shoot virus, which is expected to result in their eventual death.

The swollen shoot virus spreads through mealybugs, tiny insects that feed on sap. Its manifestations include swollen shoots, distorted leaves, and vein discoloration. In severe instances, it can cause branch dieback and, eventually, the demise of the tree. This season, around 20% of Ivory Coast’s cocoa crop has been affected by this virus.

In March 2024, cocoa bean prices surpassed $7,000 per tonne, nearly three times more than the price from exactly a year ago, and prices continue to rise. The stock-to-consumption ratio is expected to decrease to 30%, reaching its lowest level since 1985. A shortfall of 279,000 metric tons in the worldwide cocoa market is projected to occur during the 2023–24 season.

Experts state that chocolate will become a luxury in the near future. “It will be available, but it’s going to be twice as expensive,” claims Tedd George of Kleos Advisory.