Chocolate prices are rising, here’s why
Chocolate prices in South Africa have been on the rise in recent months. New reports explain the reasons behind the growing increase.
You may have already noticed the price of chocolate in South Africa steadily rising in recent months. This author, for one, has noted a near doubling of the price of his favourite chocolate in South Africa. So, the once a week treat is now becoming far less frequent.
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But now, a report from Business Tech confirms that record-high cocoa prices worldwide are starting to curb global demand and impact the price of chocolate in South Africa … and everywhere else.
PRICE OF CHOCOLATE IN SOUTH AFRICA
According to commodity.com, just less than 5-million tons of cocoa beans is consumed annually. However, it is still one of the highest-value agricultural commodities due to how labour intensive it is.
Cocoa prices are extremely volatile, spiking regularly because of typical issues faced by large exporters. Issues like smuggling, adverse weather and the fact that very specific climatic conditions are needed to grow cocoa. When any of these come out of alignment, the price of chocolate jumps.
AFRICAN NATIONS LEAD THE WAY
Good climactic conditions are mostly found along the equator, so the world’s largest cocoa producer is Ivory Coast, which accounts for 2.2 million tons. Next is Ghana with just less than 1-million tons. However, recent poor crops and disease in West Africa have lowered cocoa production and driven up the prices. And experts warn we’re not far from a global shortage.
The Ivory Coast has seen a decrease of 33% production year-on-year. Strong winds and insufficient rain in West Africa have damaged cocoa fields, further worsening the situation. Likewise, Ghana has reduced its cocoa production estimate for the year to 700 000 tons. This is the lowest in 14 years and well below its 1-million ton yield.
WATCH PRICES RISE
Therefore, Mondelēz South Africa, Mzansi’s largest chocolate manufacturer, says it has no choice but to implement price hikes on all its products. A rise in the price of chocolate in South Africa will cover the record-high cocoa prices. Even as an overall drop in consumer spending adversely affects the company’s profits.
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