If, like me, you have overindulged over Easter, there are worrying signs in the market for chocolate lovers. The price of cocoa surged past US$10,000 a tonne for the first time at the beginning of April, more than triple the price a year ago as poor harvests in Africa cause a shortage. El Nino brought heavy rains in December, damaging crops and encouraging the spread of black pod disease, and as a result crop yields in Ivory Coast and Ghana, which together produce more than two thirds of the world’s cocoa beans, are down sharply.
Used by millions of farmers as a way to escape poverty, the world has had a plentiful supply at low prices. Decades of low prices however have seemingly left farmers unable to invest in plantations, and with the last significant tree planting undertaken over 25 years ago, the older trees are now more vulnerable to bad weather and disease. The money has always been made around trading the beans and processing them into chocolate rather than planting, growing and harvesting the trees themselves.
The ensuing scramble to find enough beans to meet consumer demand has had predictable consequences. As readers will know, demand in excess of supply tends to drive up prices and there is a suspicion that the move has also been exacerbated by traders who had placed bets that prices would collapse and are now being forced to close their positions to protect themselves against further losses.
Processing plants are struggling to source beans, and manufacturers cannot procure sufficient cocoa butter. Whilst chocolate makers could suffer reduced profit margins on sales, it seems more likely that they will ultimately pass these rising costs on to consumers. Possibly the excuse we all need to have one last Easter Egg before they disappear from the shelves until next year.
