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Daily Maverick
5 days ago
- Business
- Daily Maverick
Choc to the system — sweet treats under siege as cocoa prices soar globally
Climate shocks, crop disease and a global supply shortage are resulting in South Africans paying up to 40% more for their favourite chocolate bars and slabs. World Chocolate Day was celebrated annually in the first week of July, but this year there wasn't much to be merry about. In May, global cocoa prices hit R197,500 per tonne. From R154,000 in July 2024, it has been a relentless upwards march and it's hitting South Africans' wallets. And, if that Aero or Bar One feels lighter lately, it's because the world has entered an unprecedented era of chocflation. Ghana and Ivory Coast together produce the lion's share of the world's cocoa. Extreme weather and crop diseases have hit these producing regions exceptionally hard over the past five years. 'The increased variability of seasonal rainfall in the producing areas of the world due to climate change has threatened the viability of cocoa production,' says FNB senior agricultural economist Paul Makube. Cocoa trees need temperatures of between 20℃ and 30℃ and just the right amount of rainfall to grow, Makube explains, but droughts are becoming more frequent and farmers are being forced to adapt or abandon their crops. In addition to climate extremes, crop diseases are decimating harvests. Makube says the cocoa swollen shoot virus has been causing disease that has cut about 17% of Ghana's annual cocoa output over the past few years. Other disease threats that have adversely affected production include witches' broom, frost pod rot and black pod rot, says Thabile Nkunjana, senior economist at the National Agricultural Marketing Council. 'The production, yields and quality of cocoa have all been significantly impacted by these factors and consequently prices have risen sharply in recent years,' Nkunjana says. The numbers are eye-watering. As of June, cocoa hit R215/kg – the highest since the World Bank began tracking prices in 1960, Nkunjana says. In 2023 it was just R66/kg. The International Cocoa Organisation now predicts a global supply shortfall of nearly 500,000 metric tonnes for the 2023/24 season. Nevertheless, the global production outlook remains optimistic, Makube says, although demand prospects are worsening because of 'the uncertainty regarding potential inflationary pressures emanating from the US tariff onslaught'. Global squeeze, local crunch The shock is rippling across the globe and down to the local supermarket. In 2016, a chocolate slab in South Africa would have cost an average of R13.27, according to Statistics South Africa. Today, the price of a Dairy Milk slab ranges from R20 to R50, depending on where one shops. Data from consultancy group Eighty20 shows double-digit inflation on chocolate prices almost every year since 2020, far outpacing the overall consumer inflation rate. Since December 2021, the price of chocolate bars has shot up 40%. Spar is 'closely monitoring the global cocoa supply challenges and the resulting price increases in chocolate products', says Gerhard Ackermann, national merchandise executive at the Spar Group. The retailer is trying to cushion the blow with value promotions and proactive stock management. Pick n Pay says it 'always works to deliver the most affordable prices' while ensuring shelves stay stocked. South African chocolatiers are also recalibrating to weather the cocoa price storm. For Beyers Chocolates, a family-owned company that has been making chocolates since 1987, the steep rise has posed many challenges, says its marketing lead, Susan Krause. The company has responded with 'long-term supplier partnerships, smarter procurement planning and operational efficiencies across the value chain', Krause says. By keeping production local, it has been able to soften some of the cost hikes. At luxury craft chocolate maker Afrikoa, which sources its beans from farmers in Tanzania, the sustained increase in prices has heavily influenced cost, even though direct trade has helped the company to absorb 'some volatility', according to head chocolatier Kyle Hickman. Afrikoa has had to become 'more agile in production planning, prioritising efficiency and minimising waste', Hickman says. But he notes a silver lining in that 'informed consumers increasingly value the kind of responsible production that Afrikoa represents', which strengthens the company's brand story despite price sensitivity. Honest Chocolate cofounder Anthony Gird says the rise in cocoa prices, especially over the past two years, has led the company to 'do a price increase just to keep up' earlier this year. He is hoping it won't have to happen again soon, as the cocoa price hasn't risen significantly since Honest Chocolate's last bean consignment purchase. The company's clientele, Gird says, are understanding. 'People who buy our chocolate understand the value in the quality and ethics of the product.' Even global brands like Nestlé are trying to manage the chocflation. The company's 'Africa for Africa' model is focused on local sourcing and production and is tightening operations to manage costs, says Conny Sethaelo, communications director at Nestlé's east and southern Africa region (ESAR). 'This helps us maintain relevance and trust, even in challenging economic conditions,' she says. Laboratory-crafted luxury While traditional cocoa producers and users fight high prices, some scientists are bypassing the pod entirely. Using plant cell cultures in vats of sugary water, researchers are growing cocoa in labs. But not everyone is excited by the science. 'We respect the innovation behind lab-grown alternatives, but our brand is firmly rooted in celebrating the authenticity of African-grown cocoa,' Hickman says. Gird echoes this sentiment and says Honest Chocolate won't be considering lab-grown cocoa in the near future. 'If cocoa supplies dry up to the extent that it becomes needed, then we would be open to giving it a try.' Krause says Beyers Chocolates is 'keeping an eye on global innovations in the category' and is open to sustainable practices that fit its values. Nestlé, on the other hand, is more focused on soil. 'Nestlé ESAR is investing in regenerative agriculture, traceable technologies and community-based farming models,' Sethaelo says. Climate change is hitting cocoa farming hard and Nkunjana notes that Africa is especially vulnerable. 'Policies that lower the danger of climate change and protect farmers from losses should be given regional priority,' he says. These policies will encourage farmers to grow their cocoa production and improve production as a result. Makube sees a way through: a mix of infrastructure upgrades, financial access for farmers, sustainable agroforestry and public-private partnerships. 'The world needs to think about close substitutes for food or food commodities in general in light of the difficulties cocoa is facing,' Nkunjana warns. 'This will ensure that there is a steady supply of food and protect consumers from price shocks.' Despite the crunch, the nation's sweet tooth is undeterred. More than half of adult South Africans have eaten some form of chocolate in the past month, Eighty20's data shows. Bar One, Lunch Bar, Aero, Black Cat and KitKat remain at the top of the sugar-fuelled food chain. Even the viral Dubai chocolate phenomenon, which debuted at an astronomical price point of R1,000 last year, has found a niche, with R400 versions now for sale at Dis-Chem.
The South African
30-04-2025
- Business
- The South African
South African braai costs heat up—Here's why
South African braai costs are heating up as prices soar in 2025. If you're planning a braai this month, prepare to spend significantly more. The latest South African Braai Index reveals that the cost of a typical braai basket has surged by 4.0% month-on-month and 4.03% year-on-year, far outpacing general inflation. This price spike underscores a harsh reality for South African households: grilling now costs more than ever in 2025, even if prices haven't yet hit previous record highs. The Pietermaritzburg Equity Justice and Dignity (PMBEJD) group, in collaboration with Bloomberg, compiles the monthly Braai Index by tracking prices of essential braai ingredients. In April, vegetables took the lead in driving up costs: Tomatoes shot up by 26% Carrots increased by 20% These sharp hikes highlight the volatility in basic food prices. Over the past year, maize meal has emerged as the biggest driver of long-term cost increases, spiking 21% since April 2024. The Bureau for Food and Agricultural Policy (BFAP) attributes this to global and local supply disruptions. South Africa's maize prices have surged due to: Low stock levels following poor 2024 harvests Strong demand from neighboring countries A delayed 2025 planting season Global issues, including Brazil's shrinking supply and crop issues in Argentina After a brief dip in March, beef prices are climbing again—and they're not slowing down. A butcher told News24 that in April, beef carcass prices jumped 32%, soaring from R56 to R74 per kilogram. Thabile Nkunjana, Senior Agricultural Economist at the National Agricultural Marketing Council (NAMC), explained on The Money Show: 'We usually see a decline in commercial livestock early in the year because farmers are coming from a higher slaughtering number for the festive season. But this is being exacerbated now.' He cited several contributing factors: A shortage of slaughter-ready cattle High feed costs caused by extreme weather patterns—drought followed by heavy rains Lower grain yields, which have pushed up feed prices and stalled livestock readiness 'The higher cost of feed will limit some of the farmers' ability to bring their animals to abattoirs because they're not ready for market,' Nkunjana added. Despite the spike, Dewald Olivier from Red Meat Industry Services offered some reassurance, telling Channel Africa: 'There isn't actually a shortage of beef—just a temporary tightening of supply.' Still, consumers are feeling the pinch as prices trend upward across the board. While beef is blazing hot, the poultry market has cooled, thanks to international price trends and favourable exchange rates. Pig and sheep meat, not tracked in the PMBEJD Braai Index—have ticked slightly upward, reflecting global increases and the ongoing challenge of high feed costs. If you're firing up the grill this April, expect higher prices for nearly every essential braai item. From maize meal to meat, South Africans are feeling the heat—long before the fire even starts. Stay tuned with The South African as South African Braai costs heat up. How will this affect your wallet going forward? Let us know by leaving a comment below or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X, and Bluesky for the latest news.
