Cocoa futures continue to rise, as today (18.03.24), the price per ton climbed to $8,394.
This means that the price of cocoa has more than doubled since the beginning of the year, which is due to the continued poor supply situation, according to faznet. Plant diseases and extreme weather conditions, especially in the main growing region of West Africa, threaten unprecedented supply shortages.
Cocoa processing plants in West Africa are currently forced to stop production from time to time.
The situation is also made worse by new EU regulations, according to which suppliers must prove that no trees were cut down to produce the cocoa, but this is not easily achieved.
There is still no clarity on the upcoming harvest, said Fuad Mohammed Abubakar, head of the British Ghana Cocoa Trading Company. The supply situation will not improve in the coming months.
However, growing demand is also fueling the supply gap. Although Switzerland and Germany still consume the most chocolate per capita, Asia is closing in here as well. Malaysia, Indonesia and the People’s Republic of China are increasingly importing chocolate.
Anyone worried that the prices of chocolate eggs and Easter bunnies might skyrocket can rest easy, the same publication notes.
Current production uses even more cocoa, which was bought at significantly lower prices last year.
However, further increases in the prices of chocolate products should be feared, even if the price of cocoa falls significantly, as today it is about four times more expensive than the historical average.
However, anyone who thinks that high prices also benefit farmers is wrong. In the world’s two main producing countries, Ghana and Ivory Coast, (semi-state) cartels set fixed prices for cocoa beans. “For the state and the elites, high prices in the world market mean good income and this can also have a stabilizing effect on the economy as a whole. However, producers initially receive nothing from the price increase,” says Misereor fair trade specialist Wilfried Wunden. Ghana’s trade body Cocobod said it could not pay farmers more because they had sold the cocoa at prices well below current prices. Sudden price spikes are almost impossible to map because of the long production season and the need to compensate by selling the crop early. The spot market always carries the risk of being hit by sudden price collapses.
Very low prices for a long time
However, Wooden says prices have been very low for years. In Ivory Coast, cocoa farmers earned an average of €2,130 in 2020 – but the estimated living wage in the country was equivalent to €5,500 per year. That created enormous pressure for growth, says Wooden. Production increased extensively with the expansion of cultivated land. This process is gradually coming to an end, on the one hand because the EU, which is the main buyer area, is taking measures against deforestation, and on the other hand because forest land is shrinking and grassland land is less suitable for cultivation.
Extreme fluctuations are a particular problem for Wooden. The great incentive to switch completely to the supposedly profitable cocoa crop carries great risk. In the long run, a price close to producers’ production and living costs is required. Fair trade chocolate bunnies therefore also contribute to the future of cocoa production.
Meanwhile, Silvia Monetti, expert on food prices and nutritional poverty at the consumer advisory center of North Rhine-Westphalia, calls for the creation of a food price monitoring centre. Prices for chocolate bunnies range between 9.93 and 37.90 euros per kilo and for chocolate eggs between 7.25 and 29.90 euros per kilo. Such wide price ranges are surprising, as all manufacturers are affected by higher cocoa prices.
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