Topline The skyrocketing price of cocoa surged again Tuesday, topping $10,000 per metric ton for the first time, and some chocolate companies plan to respond to the increase by upping the cost of products, decreasing product sizes and advertising candies with less cocoa. Chocolate eggs and easter almonds on bird nest, chocolate bunny and sweets on white wooden table Key Facts This price is more than double what cocoa was trading for in January, as it fell just below $4,200, and almost five times more than what it was in March 2023, as prices topped out at $2,927, according to a report by the International Cocoa Organization (ICCO). Top chocolate makers Hershey and Mondelez (the maker of Cadbury) have said they intend on hiking product prices to cover for the surging cocoa cost, meaning consumers will be paying more for chocolate in stores. This method has worked in the past as the companies didn't lose demand while cocoa prices have been steadily increasing over the past few years, but it may have been ineffective last year as Hershey’s sales volume was down 6.6% in the fourth quarter. Other companies like
Mars have resorted to decreasing the sizes of their chocolates while selling them for the same price, or promoting candies with less cocoa—like hazelnut-based products—according to a Bloomberg report . The National Retail Federation predicts spending on Easter candy will drop to $3.1 billion this year, or $24.78 per shopper, down from $3.3 billion in 2023, or $26.31 per person, according to a recent report . Key Background About 70% of the world’s cocoa is grown in West Africa, international trade association CropLife International reports . The rising prices are a result of lackluster, weather-related crop yields in West Africa. El Niño—above-average sea surface temperatures in the Pacific Ocean that affects global climate patterns—has caused warmer temperatures and heavy rains in the region, which has resulted in a decline in crop yields. The ICCO attributed “unseasonal heavy rains” as the main reason the cocoa supply was affected late last year. These heavy rains have led to the spread of a fungal infection called black pod disease . This disease infects the pods, roots, stems, shoots and flower cushions of cocoa trees, causing beans to rot internally. It typically occurs during rainy seasons and is spread when rain splashes on the plants. Tangent Sugar prices are also rising. Global sugar prices hit their highest trading value since 2011 at the end of 2023, and while they were lower in February, they’re on an incline, according to the International Monetary Fund. Retail prices for sugar and sweets are predicted to increase by 5.6% in 2024, according to data from the U.S. Department of Agriculture, and analysts predict sugar prices will close the year at 24.5 cents per pound, up 19% from the end of 2023. El Niño is also at fault, causing a decrease in sugar production in South and Southeast Asia. However, sugar production is up in Brazil—the biggest global producer of sugar—though exports have declined in recent months, the Department of Agriculture reported . This is because the high number of ships and long waiting times have caused the pace of exports to slow. The department also predicted production in
Mexico to be the lowest it’s been in around 12 years, due to adverse weather conditions.