Rising cocoa prices won’t impact chocolate prices ...

Rising cocoa prices won’t impact chocolate prices too heavily: here’s why

Inflation and the cost-of-living crisis are hitting many hard and people have experienced the pinch that the increased cost of products creates. Chocolate is a product that many enjoy, and no doubt people have noticed the increased cost and reduced size from some popular brands.

In this year alone the price of cocoa has shot up from US$4,275 a tonne to US$9,481 after hitting a high of US$10,274 earlier in the year. Intense heat and then rain has hit harvests in West Africa hard which means yields are expected to fall short for the third consecutive year.

An increase of US$5,000 per tonne means an increase of 50 US cents per 100 grams. Inevitably the rise in cocoa will have an effect on the price of chocolate—alongside other factors that will affect price. A typical bar of chocolate weighing 45 grams contains approximately 15 per cent cocoa, which means the increase price of cocoa is only capable of increasing a chocolate bar by around six Australian cents.

Big confectionary brands have increased the cost of their products a significant amount this year alone. Nestlé increased prices by 9.5 per cent, Mondelēz (who produce Cadbury) by 15 per cent and Mars by 15 per cent.

The increase of the cost of cocoa would, many would think, lead to increased profit for growers. Sadly, this isn’t the case. According to Visiting Professor in Practice at the Grantham Research Institute on Climate Change and the Environment, Darian McBain in some countries 90 per cent of cocoa growers don’t earn a living income.

While the increased price may help a little—like helping educate workers children instead of putting them to work—it doesn’t necessarily create certainty about future prices and income. Some confectionary brands are beginning to set goals to help increase growers and farmers earnings which should create a positive impact.

Mars has a target of doubling the income of its cocoa farmers in Cote d’Ivoire and Indonesia by 2030 which is a positive first step.

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