Global Cocoa Shortage: Chocolate To Get More Expensive (image-X/pixabay)The chocolate industry is bracing for a major upheaval as a global cocoa shortage is likely to send the prices of chocolate bars soaring. Major chocolate manufacturers, including Cadbury, Nestle, Hershey’s, and Mondelez, are likely to be affected as the cocoa shortage will increase input costs for companies, leading to increased prices for consumers.
Other chocolate-containing products, such as biscuits and ice cream, are also likely to be affected.
On Tuesday, cocoa prices topped $10,000 a tonne during intra-day trade, according to Bloomberg, making the plant more expensive than copper. Prices for the plant have doubled, attributable to crops in Ivory Coast and Ghana being ravaged by disease and unpleasant weather. Both Ivory Coast and Ghana contribute to around 60 percent of the world’s cocoa production.
Additionally, in the 2023–24 season, the cocoa supply also experienced an eight percent dip.
In India, cocoa prices have increased three times, said Jayen Mehta, MD of the Gujarat Cooperative Milk Marketing Federation (GCMMF) (Amul). He added that since Amul is competitively priced, the brand is hopeful that consumers will remain loyal to the brand. Amul produces huge volumes of chocolate and also uses it as an ingredient in ice creams and other products.
Brands and local chocolate makers that use pure chocolate are likely to be affected, while those who use substitutes such as vegetable fat for pure cocoa butter would not feel the pinch. While some brands are considering increasing prices, others are thinking of alternative strategies, such as using substitutes for cocoa butter approved by the Food Safety and Standards Authority of India (FSSAI) and reducing pack sizes. However, chocolate makers dependent on fine-flavour cocoa may find this time particularly challenging.
Experts are sounding the alarm about the impact on consumers’ wallets and the confectionery market as a whole, as companies will struggle to maintain margins as they would be compelled to source cocoa at hiked prices.