logo
Cone crisis? Why ice cream prices are soaring this summer

Cone crisis? Why ice cream prices are soaring this summer

First Posta day ago

An analysis by British consultancy firm Rift found that the cost of ice lollies and cones in UK supermarkets increased by 7.6 per cent in May. With the global ice cream market estimated at $81 billion (nearly Rs 7 lakh crore) in 2024, there is increasing attention on rising prices. Notably, coconut oil, a key ingredient in many ice cream products, has become more expensive, leading to the overall price hike read more
An analysis found that prices of ice lollies and cones in UK supermarkets rose by 7.6 per cent in May. Image: Pixabay/Representational
Summer and ice cream go hand in hand.
But what if that chilled treat ends up costing more right when the heat is at its peak?
An analysis by British business consultancy Rift found that prices of ice lollies and cones in UK supermarkets rose by 7.6 per cent in May.
ALSO READ | Having ice cream to beat the heat? Here's why it's not the best idea
With the global ice cream market valued at $81 billion in 2024, there is a growing focus on what is behind these changing prices.
STORY CONTINUES BELOW THIS AD
So, what's pushing ice cream prices up, and which parts of the world are behind the impact?
We answer these questions:
Why ice cream prices are rising this summer
Coconut oil is an essential ingredient in many ice cream products, and its rising cost has pushed up ice cream prices this year.
As demand continues to be higher than supply, prices are expected to go up further.
Further price gains are likely as demand continues to outpace supply.
Last year, the ice cream industry brought in close to $80 billion in sales. Image: Pixabay/Representational
Last week, coconut oil from the Philippines, being sold wholesale in Netherlands' Rotterdam, crossed $2,700 per metric ton. That's almost twice the price compared to the same time last year and roughly 200 per cent higher than the average between 2000 and 2020.
The earlier peak was in 2011, when prices touched around $2,300, as per a Bloomberg column by Javier Blas.
Coconut oil is widely used in the food industry due to its high melting point. It helps ice cream, especially gelatos and varieties with hard shells, stay solid at room temperature without changing the taste or texture.
Ice cream is a major global industry. Last year, it brought in close to $80 billion in sales.
What is driving coconut oil prices up?
Coconuts grow best in tropical climates with plenty of sunshine and rain. But over the past year, weather patterns have disrupted this balance.
The El Nino phenomenon, which causes warmer sea surface temperatures across the Pacific, brought drier conditions to Southeast Asia from June to October last year.
This has had a direct impact on coconut production in Indonesia and the Philippines, which together supply about three-quarters of the world's coconut oil.
STORY CONTINUES BELOW THIS AD
Because coconut trees take around a year to bear fruit, the dry spell has resulted in smaller yields in 2024, reducing the available supply.
Coconut oil is an essential ingredient in many ice cream products. Image: Pixabay/Representational
However, this decline alone was not enough to cause the sharp spike in prices. The bigger factor lies in a different part of the coconut market: biofuels.
In the Philippines, the government requires diesel to be blended with coco methyl ester, a fuel additive made from coconut oil.
At first, this policy had little effect on overall supply. But in October last year, the blending target was raised to 3 per cent, with plans to reach 4 per cent by late 2025 and 5 per cent by the end of 2026.
ALSO READ | How a Chinese company beat Starbucks, McDonald's to become world's largest fast-food chain
Which countries should be watched?
The Philippines is the largest producer in this market, accounting for 45 per cent of the world's coconut oil.
As the government shifts large volumes of coconuts into biofuel production, ice cream prices in the United States and Europe are expected to rise as a result.
STORY CONTINUES BELOW THIS AD
If current plans are followed, the Philippines will divert around 4.5 billion coconuts to produce the 500 million litres of coco methyl ester needed to meet its biodiesel targets by late 2026, according to Bloomberg.
Coconuts grow best in tropical climates with plenty of sunshine and rain. Image: Pixabay/Representational
Indonesia, the second-largest supplier, contributes 28 per cent, followed by India at 13 per cent. The rest of the supply comes from about a dozen other tropical nations, including Vietnam, Bangladesh, Sri Lanka, Mexico and Ivory Coast.
Due to poor weather in 2023 and 2024, global production is expected to fall to 3.6 million metric tons in 2024-25, a drop of nearly 10 per cent from the previous season. Early estimates suggest that production will likely remain low in 2025-26 as well.
Are chocolates adding to the problem?
To cut costs and protect profit margins, more chocolate manufacturers are replacing cocoa with cheaper alternatives like coconut oil.
Even at current high prices, coconut oil remains more affordable than cocoa.
It is a common substitute for cocoa butter, especially in vegan and dairy-free chocolates.
This growing shift in the chocolate industry is adding further demand pressure to an already strained coconut oil supply.
STORY CONTINUES BELOW THIS AD

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

HC asks MMRDA to deposit Rs 1,169 crore arbitral award in dispute with Reliance Infra
HC asks MMRDA to deposit Rs 1,169 crore arbitral award in dispute with Reliance Infra

Time of India

time15 minutes ago

  • Time of India

HC asks MMRDA to deposit Rs 1,169 crore arbitral award in dispute with Reliance Infra

The Bombay High Court on Tuesday directed the Mumbai Metropolitan Region Development Authority (MMRDA) to deposit the arbitration award of Rs 1,169 crore with the court registry in connection with its dispute with the Mumbai Metro One Pvt Ltd ( MMOPL ), a subsidiary of Anil Ambani's Reliance Infrastructure . The MMRDA, a Maharashtra government agency, has moved the HC challenging two orders -- of August 2023 and February 2024 -- passed by a three-member tribunal in arbitration between MMOPL and MMRDA for various disputes including the cost of the metro project. The MMRDA, in an application, sought an interim stay to the arbitral award till the petition was heard and decided. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like B. Tech. Engineering Technology For Working Professionals. BITS Pilani WILP Apply Now Undo Justice Somasekhar Sundaresan on Tuesday refused to grant any interim relief without the amount being deposited. When parties agreed to submit themselves to arbitration and it culminated in an award, the money decree in the arbitral award is not something "written on water and irrelevant", said the judge. Live Events "Routinely granting a stay and that too without any deposit would run counter to the explicit legislative intervention that was made by Parliament to give teeth and relevance to arbitral awards," the HC said. The court further said no case was made out for an unconditional stay. If the MMRDA deposited the entire amount by July 15, then the execution of the award would be stayed pending final hearing and decision on the MMRDA's petition, it added. MMOPL, a joint venture of Reliance Infrastructure and MMRDA, operates Mumbai's first metro line on Versova -Andheri-Ghatkopar corridor. While Reliance Infrastructure holds 74 per cent stake, the rest is with MMRDA. The disputes between the two parties relate to the development, design, engineering, financing, procurement, construction, operation and maintenance of metro rail under a 2007 agreement. The metro rail project started with a delay of over two years. MMOPL claimed that the project costs increased from Rs 2,356 crore to Rs 4,321 crores, which the MMRDA contested. PTI

Is Mark Zuckerberg building a Superhuman AI with Meta's new AGI dream team? Here's what report suggests…
Is Mark Zuckerberg building a Superhuman AI with Meta's new AGI dream team? Here's what report suggests…

Mint

time24 minutes ago

  • Mint

Is Mark Zuckerberg building a Superhuman AI with Meta's new AGI dream team? Here's what report suggests…

Mark Zuckerberg, Chief Executive of Meta Platforms, is reportedly spearheading an ambitious push towards developing artificial general intelligence (AGI) — a form of AI designed to rival or surpass human cognitive abilities. According to a Bloomberg report published on Tuesday, Zuckerberg is personally overseeing the formation of a specialist unit focused on AGI research, marking a significant shift in Meta's AI strategy. The report suggests the tech billionaire is preparing to recruit around 50 top-tier researchers, including appointing a new head of AI research to lead the initiative. This move coincides with Meta's anticipated multi-billion-dollar investment in Scale AI, a prominent American data-labelling company. Sources indicate that Scale AI's founder and CEO, Alexandr Wang, is expected to play a key role in the AGI project once the investment is finalised. While Meta has not issued an official response and Mint was unable to independently verify the report, the Bloomberg report views this development as a response to internal dissatisfaction with Meta's current AI offerings. In particular, there has been reported frustration surrounding the performance and reception of the company's latest large language model, Llama 4. Further fuelling speculation, the Wall Street Journal recently reported that Meta postponed the release of its next-generation AI system, codenamed 'Behemoth', over unresolved concerns about the model's capabilities and potential risks. Meta's intensified focus on AGI aligns with similar efforts from rivals like OpenAI, which are also courting investors and reshaping internal teams to accelerate progress in this high-stakes frontier of technology. In other news, Meta Platforms has also reportedly partnered with defence tech firm Anduril Industries to create advanced 'mixed reality' equipment aimed at boosting soldiers' situational awareness on the battlefield. According to AFP, the collaboration will integrate Meta's expertise in augmented reality (AR) and artificial intelligence (AI) with Anduril's Lattice data analytics system. The resulting product—potentially in the form of AR glasses, visors, or goggles—is expected to help military personnel better interpret and respond to real-time data during operations. (With inputs from Bloomberg and Reuters)

SBI report finds India's household debt rise not a cause for concern
SBI report finds India's household debt rise not a cause for concern

First Post

time26 minutes ago

  • First Post

SBI report finds India's household debt rise not a cause for concern

The Reserve Bank of India (RBI) sees the increase in household debt as sustainable, especially given two-thirds of the portfolio is made up of prime and above-credit-quality borrowers read more What happened India's household debt has been on the rise over the past three years. However, according to a report by the State Bank of India (SBI), this increase is not a cause for concern. The Reserve Bank of India (RBI) sees the increase in household debt as sustainable, especially given two-thirds of the portfolio is made up of prime and above-credit-quality borrowers. Tell me more - SBI reports that two-thirds of household debt in India is of prime and above credit quality, indicating strong repayment capacity. STORY CONTINUES BELOW THIS AD - The increase in debt is attributed to a higher number of borrowers, not excessive borrowing by existing borrowers. - Around 25% of household loans are for asset creation (homes, vehicles). - Another 30% are for productive purposes such as agriculture, business, and education. - 45% of loans (personal, credit card, and consumer durable) are used for consumption. - India's household debt stands at 42% of GDP, lower than the 49.1% average among other emerging market economies (EMEs). - The RBI's rate-easing cycle has led to a 100-basis-point cut in the repo rate, reducing interest rates on loans linked to external benchmarks. - Approximately 80% of retail and MSME loan portfolios are now linked to the External Benchmark Lending Rate (EBLR), leading to potential savings of Rs 50,000–60,000 for households. - The rate cut cycle is expected to continue for two years, helping further reduce household borrowing costs. - Last week, the RBI reduced the repo rate by 50 basis points to 5.5% and also cut the Cash Reserve Ratio (CRR) by 100 basis points in four tranches. The context Household debt is a key indicator of financial stability, and while rising debt can be risky, the structure and quality of India's household borrowing paint a relatively healthy picture. STORY CONTINUES BELOW THIS AD

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store