Bitter truth: Why has chocolate become so expensive?

Al Jazeera

21-04-2025

Cocoa prices surged almost 300 percent last year, making chocolate bars, easter eggs and cocoa powder much more expensive this year than last.
In the US, retail chocolate prices were one-fifth higher this Valentine's Day compared with last year, according to Wells Fargo Bank. The price of a king-size US-sold Reese's Hearts chocolate bar was 13 percent higher in February 2024 than in the same month the year before.
In the United Kingdom, meanwhile, a Twix white chocolate Easter egg rose in price from 5 to 6 pounds ($6.63 to $7.96) at Tesco supermarkets in the run-up to Easter (year-on-year) and was reduced in size from 316g (11oz) to 258g (9oz). In all, the unit price rose by a whopping 47 percent.
While the price of cocoa – made from roasted raw cacao beans, the key ingredient in chocolate – has fallen back by about 20 percent since its all-time high in December 2024, consumers are still paying record prices for chocolate.
The spike in the price of cocoa can be chalked up to several factors. Chief among them is extreme weather, which has hit cocoa producers in West Africa, from where most of the world imports cocoa.
According to Amber Sawyer, an analyst at the environmental think tank Energy and Climate Intelligence Unit (ECIU), expensive chocolate shouldn't come as a surprise.
'Chocolate is just one of the many foods being made more expensive by climate change-driven extreme weather,' she said. 'These extremes will keep getting worse.'
And so might the prices.
Benchmark New York futures contracts, used to exchange cocoa at a specified future date and price, hit a high of $12,565 per metric tonne in December 2024.
Last year's meagre cocoa harvest led to record supply shortfalls, as poor weather and disease devastated crops in Ghana and the Ivory Coast, where two-thirds of the world's cocoa beans are grown.
Crop shortages were also observed in Nigeria and Indonesia, the third- and fourth-largest cocoa producers.
In all, there was a 500,000-tonne deficit of cocoa in global markets in 2024, which is continuing to keep prices high.
The latest cocoa harvest – which ran from October 2024 to March 2025 – did get off to a bright start, with 33 percent more beans arriving at Ivory Coast ports compared with last year, Commerzbank analyst Carsten Fritsch said in a note to clients.
But while the New York cocoa futures price is currently hovering at about $8,350 per tonne – a significant drop from December – concerns are growing that the same dry weather that wrecked last year's crop will take a similarly devastating toll this year, Fritsch said.
The uncertainty is taking a toll on chocolate producers. Swiss chocolate maker Barry Callebaut slashed its annual sales forecasts on April 11 due to what it called 'unprecedented volatility' in cocoa prices, sending its shares falling almost 20 percent – its biggest ever one-day drop.
Volatile weather is one major factor. West Africa experienced extreme rainfall in 2023, with total precipitation more than double the 30-year average in some places, while 2024 saw extreme heat and drought.
Many climate scientists point to the El Nino weather phenomenon, which produces warmer-than-average sea surface temperatures in the central and eastern tropical Pacific Ocean, as the primary driver for volatile weather patterns. However, they also expect a transition to the La Nina pattern – the cooling of ocean surface temperatures in the central and east-central equatorial Pacific every three to five years – to revive cocoa yields at least temporarily.
Indeed, the International Cocoa Organization in February forecast a global cocoa surplus of 142,000 megatonnes for 2024/25, the first surplus in four years. That partly explains the recent fall in price.
But according to Felipe Pohlmann Gonzaga, a Switzerland-based commodity trader, the larger picture of 'climate change is only going to make supply concerns worse' in the longer term.
Scientists at the research group Climate Central published a paper this year showing that climate change compromised cacao trees during the harvest season in Ivory Coast and Ghana.
Besides changing weather patterns, several other issues are also driving recent price hikes in cocoa.
Across West Africa, new deforestation laws have prevented farmers from expanding cocoa plantations, keeping a lid on supply.
West Africa is also grappling with an ageing tree stock. 'Older trees are not being replaced,' Pohlmann Gonzaga told Al Jazeera. 'There has been under-investment in the industry.'
At the same time, the spread of the cocoa swollen shoot virus (CSSV) has hit harvests. Tropical Research Services, a market research group, recently found that Ivory Coast cocoa production could halve due to the spread of CSSV.
Meanwhile, Ghanaian cocoa farmers are abandoning beans for gold in an illegal mining boom that has hit Ghana's cocoa production and helped drive up prices.
In recent months, investors have been buying up the precious metal to shield themselves from the financial market turmoil unleashed by United States President Donald Trump's trade tariffs. On April 16, gold reached $3,357 per ounce for the first time.
As a result, many farmers are selling their holdings to illegal miners who have decimated swaths of land in pursuit of gold. Ghana is Africa's leading producer of gold — and the sixth-biggest globally.
'Tariffs have had an impact on the value of commodities, and cocoa is no exception,' says Pohlmann Gonzaga. 'At first, you'd think trade levies would reduce demand for cocoa in the US, which is a big consumer.' The US consumes the most chocolate in the world, though the Swiss take that tag for the most per-capita consumption.
'But if US consumption persists, that could raise prices. And of course, Trump may drop tariffs [on West African cocoa exporters] in the future, which would probably lead to higher demand.'
Pohlmann Gonzaga cited the growing demand for chocolate in East Asia. 'We may be seeing a similar trend as with coffee,' he said. China's coffee consumption, for instance, increased by more than 60 percent between 2019 and 2024.
In the near term, Pohlmann Gonzaga said prices are likely to 'trend sideways … as these factors can cancel each other out. Volatility will be the word of order for this year.'
So far, producers have responded in one of two ways – by passing the higher cost to consumers, or by promoting products with less cocoa or with substitute ingredients.
Last year, food giant Nestle introduced a hazelnut flavour to its British Aero line of chocolate bars, which, at 36g (1.3oz), are about one-third the weight of competing chocolate bars.
In 2024, agri-food giant Cargill partnered with US chocolate alternatives producer Voyage Foods – which creates cocoa-free bars from grape seeds, sunflower flour and other flavourings – to be its business-to-business distributor.
In addition to big companies, startups like Nukoko and Planet A are exploring microbial fermentation techniques to enhance and mimic the aromas and flavour of chocolate.
Elsewhere, Dubai chocolate was founded in 2022. Its products are filled with pistachio and tahini and are inspired by kunafa, the chessy, saccharine dessert that is a staple across the Middle East and North Africa. Since coming to market, it has become a social media sensation.
If cocoa prices continue rising, 'I'd expect to see more and more cocoa substitutes on supermarket shelves. The interesting question is whether consumer tastes will change,' said Pohlmann Gonzaga.