Shoppers buying chocolate in supermarkets are being warned to brace for higher prices (Image: Getty)
Shoppers buying chocolate in supermarkets are being warned to brace for higher prices due to .
Ghana and Ivory Coast are among the top cocoa-producing regions, with West Africa as a whole contributing around 80% of the world’s cocoa output, but both areas are facing a crop shortage thanks to .
Cocoa needs a significant amount of water to grow and thrives in humid, tropical environments with consistent rainfall. Ideally, cocoa plants need annual rainfall between 1,500mm to 2,000mm throughout the year, so periods of drought can have a huge impact on yields.
The International Cocoa Organization says the yield of cocoa trees year on year is affected more by rainfall than by any other climatic factor, and lower yields can have a .
Dry weather conditions in West Africa last year, combined with bean disease and underinvestment in cocoa farms, has led to a short crop of cocoa from the country this year, which in turn has pushed the price of chocolate up.
Over the course of 2024 cocoa prices nearly tripled, reaching record highs of almost $10,000 per metric ton, according to financial services firm J.P. Morgan, and it is expected that this could have wider implications resulting in higher prices on confectionery in supermarkets in 2025.
The firm says that despite hopes for a better crop in the 2024/25 season, cocoa prices are forecast to remain high in the medium term due to “supply-side constraints and firm demand”.
Tracey Allen, an agricultural commodities strategist at J.P. Morgan, said: “The world cocoa balance for 2024/25 was looking more neutral some months ago until pod counts started to decline slightly across West Africa, and demand projections have also surprised to the upside.
“Cocoa grindings – a key measure of demand for cocoa – have been much firmer than expected through 2023/24, down just 4% year over year. Overall, the world cocoa balance is shaping up to be in a modest deficit through 2024/25 of around -100,000 tonnes, versus the record deficit of around – 460,000 tonnes in 2023/24.
“The supply side of the balance will remain the most critical driver of the market amid a small recovery, alleviating to an extent the physical product constraints of 2023/24, but likely falling short of rebuilding depleted inventories. We therefore maintain our view of structurally higher cocoa prices for longer.”
Don’t miss…
As for what this means for shoppers, it is expected that chocolate brands will pass the burden of higher cocoa costs onto consumers in the form of price hikes, meaning pricier chocolate bars and snacks in supermarkets.
Celine Pannuti, head of European Staples & Beverages at J.P. Morgan, added: “Pricing has yet to pick up meaningfully, but we expect this to accelerate potentially to the low-teens in 2025. We see the chocolate market set for inflation largely unprecedented in recent history.”
Analysis by think tank the Energy and Climate Intelligence Unit (ECIU) highlighted that the UK imports around half of the food we eat, with around 50% being made up of commodities that cannot be grown here, including cocoa.
As a result, British consumers have seen average food bills go up by at least £360 over the last two years due to climate-driven extremes impacting harvests and experts warn that the combined impact of climate change and importing food will ultimately result in higher costs for consumers.
Gareth Redmond-King, head of international programme at ECIU, said: “We import half of what we eat, and it’s tempting to suggest we can simply grow more at home as heat, drought, fire and flood hit food production in too many parts of the world.
“But the UK had its wettest winter on record this year, with devastating effects for farmers trying to get food crops planted – made worse by a wet spring threatening delayed harvests. The end result is our food security is at risk, with prices of staples that we grow at home and import both pushed up by shortages.”