Poor weather and activity by speculators have combined to push up the price of cocoa, and that’s going to have a knock-on effect on the price of our favourite sweet treats, according to a Lincolnshire manufacturer.
Carol Oldbury, director of Skegness-based Hames Chocolates, says cocoa is trading a whopping 150% higher than it was 12 months ago, with prices having been climbing steadily over the last 12 months. “Given that cocoa accounts for up to 70% of your favourite chocolate treats, it’s going to be having a big impact on retail prices over the coming months.”
She says warm and wet weather in cocoa-growing regions except Cameroon pose a significant threat to cocoa trees, which require specific climatic conditions to thrive. “The result is impaired cocoa yields and quality, while excessive rainfall can cause disease outbreaks and damage crops.
“A shortage of cocoa beans will lead to a shortage of grindings, which will likely lead to a deficit of cocoa available for this current season. When global cocoa production falls short of demand, prices are driven upwards by the resulting supply-demand imbalance.”
She goes on to say that since cocoa is a traded commodity, financial markets have a significant role in cocoa price volatility and trading amplifies price fluctuations. “Twelve months ago cocoa was trading at less than $2,500 per tonne; today this has broken through the $6,000 ceiling, meaning that the main ingredient in chocolate will have increased by more than 150% in one year.”
The result, says Oldbury, is that manufacturers worldwide are going to have to pass on the cost to consumers. “We’ve left no stone unturned looking for efficiencies in the business but the large increased cost of cocoa means that we’re going to have to pass the increases on.”
“We remain committed to trading fairly and sustainably and having a positive impact on all the lives of the people we work with.” says Oldbury. Consumers too are likely to gravitate towards brands who prioritise ethical and sustainable practices.
She predicts a challenging time for the global chocolate industry. ”We believe private label product innovation and investment in efficiency and sustainability are the way through. We’ve recently invested in Solar for our factory. Not only is the energy renewable, but it is expected to provide more than 50% of our electricity usage.”
