Global Chocolate Prices at Risk as African Cocoa Production Faces Uncertain Future, Warns Report
Africa, responsible for roughly 70% of the world’s cocoa production, mainly driven by Cote d’Ivoire and Ghana, faces unsettling times ahead. The past year saw a staggering 47% surge in cocoa prices, fueled by concerns over adverse weather conditions and crop diseases impacting these cocoa giants.
The situation could further deteriorate, with experts predicting a third consecutive global cocoa shortage in the making. Rabobank and Marex, a Dutch cooperative bank and financial services platform, warn of a forthcoming decline in West African cocoa production for the 2023-24 season. Marex’s projections reveal a global deficit of 279,000 tonnes of cocoa, surpassing the combined deficits of the past two seasons.
Notably, this rise in chocolate prices has already begun to dampen consumer demand in Europe and Asia, as companies like Hershey Co. and Lindt & Spruengli have observed.
The impending cocoa crisis has several contributing factors. An El Nino weather phenomenon, a global climate influencer originating in the Pacific Ocean, is expected to disrupt wind and rainfall patterns, potentially affecting cocoa crops worldwide. The World Meteorological Organization reports a 55% likelihood of El Nino occurring in the latter half of 2023.
“African cocoa farmers grapple with soaring costs and shortages of essential fertilizers and pesticides. Additionally, the widespread presence of swollen-shoot disease in Cote d’Ivoire poses a severe threat to cocoa harvests, as explained by Steve Wateridge, head of research at Tropical Research Services.”
In May, an Oxfam survey involving over 400 cocoa farmers in Ghana revealed a disheartening trend. Their net incomes had declined by an average of 16%, while major chocolate industry players, including Hershey, Mars, Mondelez, Ferrero, Lindt & Spruengli, and Nestle, had failed to fulfill promises to improve farmer pay. This revelation underscores the challenges faced by those at the heart of the cocoa industry and the potential consequences for the world’s chocolate supply.