Chocolate could soon become significantly more expensive

The Federal Association of the German Confectionery Industry is “very concerned” about the price and availability of this “crucial raw material for chocolate”.

However, there is a long time between the cocoa harvest in Ghana, for example, and the delivery of a chocolate bar in stores. The large manufacturers of products containing cocoa have usually signed long-term contracts with fixed prices. Nestlé CEO Ulf Schneider, for example, said in April that his company was therefore “largely protected for the rest of the year”. In addition, the share of the raw cocoa price in most products is relatively small.

The confectionery association explains: “Of great importance” for future developments will be how the main harvest turns out in the autumn. Before manufacturers raise prices, which have already risen due to high inflation, they will probably resort to hidden price increases: changing the recipe or reducing the quantity at the same price.

“These prices are historic, we have never received so much,” says Ivan Ontaneda, head of the association of cocoa exporters in Ecuador. Ecuador is the world’s third-largest producer. Cocoa farmer Julia Avellan says she now gets $420 for 45 kilograms – before the price jump it was $60. “For the first time, I’m not thinking about quitting anymore.”

Africa

The companies that process cocoa beans into cocoa butter or cocoa powder are not based in the countries where the beans are grown. The big ones are Barry Callebaut in Switzerland, Cargill in the USA and Olam in Singapore. They have also secured themselves with long-term contracts. But because quantities are scarce, they still have to pay high prices for some of the raw materials they need. Barry Callebaut, for example, reported in April that the company had had to use more of its reserves to buy beans. At the same time, the company assured that it had enough cocoa to meet demand.

Raw materials expert Steve Wateridge from Tropical Research Services is also certain: “The smugglers are doing a good business.” They could buy the beans cheaply in the Ivory Coast and Ghana and then sell them at a high price on the open market in Togo, Guinea, Liberia or Sierra Leone.