Cocoa prices have risen in the mid-double digits over the last two years. They recently reached the highest price since 1977. Experts expect the increase to get much worse. Some major chocolate companies will cut back production sharply. Americans won’t be able to count on easy access to chocolate, and they can expect to pay staggering prices when they make purchases.
The trigger for the chocolate price problem is climate change—Ivory Coast and Ghana produce over half the world’s cocoa. Ivory Coast, the larger of the two by production, has a yearly crop yield of about two million metric tons. The number for 2023 will be down by over one-third from that. The effect is that the price per ton of cacao is $4,300. In September 2022, the figure was $2,300.
Ivory Coast set records for rainfall this year, which ruined a huge portion of the cocoa crop. There are two cocoa harvest periods. The second one ends in October. Siaka Sylla, who runs a local cooperative, commented on supply in early November, “It’s rained too much this year. Usually, at this time, trucks are queueing up to unload. Here, we have barely 200 bags whereas we could stock 10 times as many.”
The situation will get worse. The torrential rain this year will likely be followed by drought in 2024. According to Bloomberg, a stronger-than-usual El Niño will bring hot and dry air. The wild swing in the weather is unprecedented.
For chocolate lovers, the problem is greater than the price. Some factories will not produce chocolate at all for the next several months. Their margins have dropped so far that they are better off keeping these factories idle. If weather damages crops again, they are unlikely to reopen for much next year.
The chocolate problem is unprecedented in terms of supply more than price. High prices rarely keep commodities off the shelves. Consumers are simply forced to pay more, as they did for milk, eggs, and sugar during the US jump in inflation a year and a half ago. Chocolate, for some people, will just disappear for now.