Global production issues could leave a sour taste in chocolate lovers’ mouths at the checkout with skyrocketing cocoa prices set to reach Australian shores.
A global cocoa shortage stemming from disappointing harvests in West Africa is triggering price rises in chocolate, according to a report by agricultural lender Rabobank.
“Significantly higher chocolate prices will likely hit shelves over the coming months and going into 2025, providing a major challenge for the chocolate sector, which is already battling a longer-term, structural decline in demand,” the report said.
The primary reason is production issues in Ivory Coast and Ghana which account for 70 percent of the world’s cocoa production.
Both are seeing high levels of plant disease and farmers are not receiving the full commodity price due to the internal marketing systems.
Commodity prices have hit their highest levels in nearly 50 years as cocoa stocks sunk to their lowest in 22 years, pushing producers and manufacturers to pass on costs to consumers.
Despite prices already increasing, Rabobank’s analyst Paul Joules says the full force of the cocoa crisis is likely yet to be felt on supermarket shelves globally.
Snacks and confectionery year-on-year inflation costs had already increased by 4.6 percent in the June quarter consumer price index and if combined with the June 2023 quarter, cumulative inflation increases reached 21.8 percent, according to the Australian Bureau of Statistics.
“Due to the lag in the supply chain and existing contracts, the steepest price hikes are anticipated in the second half of 2024 and into 2025,” Joules said.
“Chocolate manufacturers are struggling with soaring cocoa costs, which are reflected in higher local retail prices for chocolate.”
Manufacturers are also resorting to shrinkflation—reducing package sizes while maintaining prices—and skimpflation—using less cocoa and more fillers—to combat rising costs.
Consumers are likely to switch between chocolate types and brands, including private or alternative items, which is expected to leave a significant drop in demand, the report said.
The cocoa price shock comes as a government-funded report by consumer advocate Choice found there is almost no difference between grocery prices at the two major supermarkets.
It comes as the Australian Competition and Consumer Commission announced on Sep. 23 it will take Coles and Woolworths to court over allegations it lied to customers with misleading specials.
