W14 Cocoa Beans Update: Concerns Over Global Supply, Chocolate Manufacturers Searching Strategies to Overcome Increasing Prices

Published 2024년 4월 12일

In W14 in the cocoa bean landscape, cocoa futures prices in New York and London have significantly increased since 2023, due to the supply shortage in the Ivory Coast and Ghana. The ICCO showed concerns about prolonged price hikes. In addition, the Ghanaian government has increased cocoa price payments to farmers by 58% YoY to tackle cocoa smuggling and improve the livelihoods of local farmers. Furthermore, the UK chocolate industry is challenged by rising cocoa prices and declined global production due to climate change. Chocolatiers explore different strategies such as raising prices, downsizing products, substituting cocoa butter with more affordable alternatives, and introducing alternative ingredients to address the issue.

Cocoa Prices Surge Due to Supply Shortage in Leading Producers

Cocoa prices in the New York and London markets have increased significantly since 2023 due to the supply shortage in the Ivory Coast and Ghana, the leading cocoa producers globally. Since the beginning of 2024, the cocoa futures in London and New York have seen a rise of 125.6% and 129.4%, respectively. The International Cocoa Organization (ICCO) is concerned that cocoa may witness the most prolonged price hikes due to the continued supply constraints.

Ghana Raises Cocoa Prices by 58% YoY to Curb Cocoa Smuggling

In response to the global surge in cocoa prices, Ghana's government has raised cocoa price payments to farmers by 58% year-on-year (YoY), amounting to USD 2.47 per kilogram (kg). This strategic move aims to curb cocoa smuggling across West African borders by aligning with the international cocoa price surge. This is also an initiative to enhance the welfare of local cocoa farmers.

The Double Challenge Faced by the Chocolate Industry in the UK

The chocolate industry in the United Kingdom (UK) faces a double challenge as cocoa prices continue to soar, and there is an expected 11% year-on-year (YoY) decline in global cocoa production in 2024 due to climate change. Four West African states supply 75% of the world's cocoa, and there are growing concerns that climate change could significantly shrink the cultivation area within the next two decades. Chocolatiers are exploring different strategies to address this issue. For instance, Sandrine Chocolates in London is considering raising prices. Some other manufacturers consider downsizing products or substituting cocoa butter with more affordable alternatives. Additionally, there is a growing trend toward chocolate bars filled with alternative ingredients, a tactic that may gain traction as cocoa prices continue to climb.