At $5,874 per ton of cocoa last Thursday in New York, the cost of the essential ingredient for making chocolate has never been higher. Just a year ago, a ton was trading at $2,581, less than half that.
The same phenomenon is observed on the London market, where prices have doubled in one year to reach 4,600 pounds per tonne, or $5,386, almost the same level as in the United States.
Falling harvests in Ghana and Ivory Coast
Times are gloomy for cocoa, whose prices are increasing in proportion to the fall in yields in West Africa, the region which supplies three-quarters of the world’s supply. The cause is a fall in harvests and, consequently, a supply deficit, due to bad weather conditions.
In Ghana and Ivory Coast, the world’s two largest producers of cocoa beans, the El Niño phenomenon led to severe drought, caused by dry and hot weather.
These effects combine with high temperatures and a rainfall deficit linked to climate change. 2023 was the hottest year on record, while at the end of last year, in a disrupted meteorological environment, excessive rains in the last quarter favored the rapid spread of the cocoa virus disease (the ” swollen shoot”) and black rot, negatively impacting production. In the absence of treatment, felling trees and replanting are the only solutions.
What impact on the price of chocolate?
Over the past four months, Ivory Coast’s cocoa shipments fell by around 39% from the previous year, to 1.04 million tonnes. In Ghana, the decline reached 35% over five months, with 341,000 tonnes. The drop in volumes raises alarm, with some analysts evoking the “panic” which would have gripped the major global chocolate makers.
Is cocoa entering a long-term inflationary crisis? Will consumers pay more for their chocolate? The surge in cocoa prices is considered lasting by many observers: “Potential cocoa yields are now permanently altered,” warned a market specialist.
Consequently, cocoa prices could continue to rise, with obvious repercussions for the end consumer, especially as chocolate manufacturers have exhausted their stocks of beans purchased at lower costs.
Stocks of cocoa beans at their lowest
The International Cocoa Organization (ICCO) does not rule out a further decline in the 2024-2025 harvests in West Africa, the prospect of a fourth consecutive annual global deficit.
According to the ICCO working group of experts on stocks, which met at the end of January, stocks of cocoa beans have been halved in Ivory Coast and by three in Ghana in two years. The next World Cocoa Conference, next April in Brussels, is particularly anticipated to assess the state of the global cocoa economy.