The cause of the explosive increase in international prices is the weather conditions prevailing in the major producing countries of Africa.
In particular, the diseases that have “hit” the trees in Ghana and the Ivory Coast, which contribute 60% of the world market, have led to a decrease in production by 30% from October 1st to March 3rd. It is indicative that the price of cocoa jumped by 165.5% within a year, from $2,674 per ton on March 10, 2023 to $7,100 on March 7, 2024. Since October, however, the first signs appeared shortages in the market, its price has increased by 118%!
Meanwhile, the International Cocoa Organization (ICCO) has forecast the global deficit in 2023/24 to widen by 300,000 tonnes, from 74,000 tonnes in 2022-2023 to 374,000 tonnes this year. In the same context, ICCO estimates that global production in 2023-2024 will decline by 11% and correspondingly cocoa grinding will decrease by almost 5%, which will push the 2023/24 stock-to-grinding ratio to its lowest level in recent years. 40 years old. Forecasts for a recovery in production are extremely unfavorable, given that the trees in the major producing countries are old and investment is insufficient.
Low cocoa supplies and rising prices have already hit chocolate makers hard, saying price hikes in the raw material are too big to absorb, leaving open the possibility of passing them on to consumers.
According to a price survey by “ET”, chocolate prices have increased by up to around 40% in the last two years. Indicatively, the price of a 38 gram chocolate bar has increased by 34.3% to 0.47 euros from 0.35 euros in June 2022, while the price per kilo, listed on the shelves, has exceeded 12 euros. At the same time, chocolate from a well-known industry is sold at the price of 1.58 euros, from 1.18 euros about 2 years ago, showing an increase of 33.9%. In fact, the price per kilo reaches 15 euros per kilo, making chocolate now an item of… luxury.
Biscuits also show big price increases, as the classic ones filled with chocolate have reached 1.30 euros (200 gram package) from 0.95 euros in the summer of 2022.
However, consumption does not seem to have been affected by the price increase – at least in the Greek market – as according to a recent survey by Circana (formerly IRI), snacks ranked third among the basic consumer goods with the largest price increases in 2023 reaching 8%. Nevertheless, sales volume moved into positive territory, showing a 4.7% increase.
Bell from the industries
Not long ago, one of the largest industries in the world, Hershey, rang the “bell” warning that its revenue would shrink in 2024 due to the high price of cocoa. In fact, during the presentation of the latest financial results, the managing director of the company did not rule out the possibility of a further increase in the prices of the products on the shelf. Mondelez seems to be facing similar problems, which has seen its financial figures shrink, noting that the high price of cocoa is one of the biggest challenges it has to face in the coming months.
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