The cocoa market has gone a little bit cuckoo.
The cost of a metric ton of cocoa has risen sharply in recent months, reaching a peak of $11,000 a ton in April, The New York Times reported on Friday. Following that, the price fell 30 percent before jumping back up, with a ton costing $8,700 as of Thursday.
What’s caused the massive swings? First, poor harvests have led to a supply crisis. Last year, the Ivory Coast and Ghana—which account for about two-thirds of the planet’s cocoa, according to the Times—experienced plant disease, aging trees, and low rainfall, which all contributed to a cocoa shortage. That in turn led to rising prices. While the price has historically sat at about $2,500 per metric ton, The New York Times wrote, that almost doubled to $4,200 a ton in December—a number that had been avoided since the 1970s. And supply doesn’t seem like it’s going to rebound anytime soon: The International Cocoa Organization estimates there will be a gap of 374,000 tons of cocoa this season, according to data cited by the newspaper.
The other factor playing a part in the extreme prices is financial speculation, with those in the industry betting that the cost would go up even more in the future. By February, that speculation had bumped up the price to more than $6,000 a ton, eventually culminating in April’s extreme numbers. And while it’s fallen some since then, it’s still way above the typical per-ton cost.
The chocolate industry itself is feeling the effects of the price increase, but so are everyday consumers. Some of the world’s biggest chocolate companies have already raised prices this year, with Hershey increasing them by 5 percent and Mondelez bumping them up 6 percent, the Times noted. (The latter owns brands such as Toblerone and Cadbury.) Both said they’d be open to raising prices even more if the cost of cocoa remains elevated.
Makers of premium chocolate, though, have been mostly immune to the current trend. They already tend to pay more for their cocoa, which they get from smaller farms, and they charge a price that ensures the quality of their product and the fair treatment of workers in the chocolate industry.
“They market chocolate as candy,” Dan Maloney, the owner of the craft chocolatier Sol Cacao, told The New York Times about larger companies. “We market it more as a luxury, something to savor, like a bottle of wine.”
And just as a bottle of wine is becoming more expensive, so too is chocolate.
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