Chocolate Gets Too Expensive
The price of cacao is so high that chocolate manufacturers are cutting back production because of concerns that demand will sink if it has not already.
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CNBC states, “In New York, benchmark ICE cocoa futures stood at $6,549 per metric ton on Wednesday. The contract, which surpassed $6,000 for the first time last month, has climbed more than 57% year-to-date.”
There is no reason to believe the West African climate crisis will change enough to drop prices sharply. Ivory Coast supplies 44% of global supply, and Ghana supplies roughly 14% of output. Crops were pounded by heavy rain last year and drought this year.
Manufacturers like Hershey worry that the Eastern holiday will have lower demand than in recent years.
Bloomberg reported When Mars Inc. made a quiet tweak to its popular Galaxy chocolate bar last year, shaving 10 grams off the standard product size and repackaging the leaner treat without lowering the price, UK shoppers were surprised—but cocoa traders weren’t.
Has chocolate gotten too expensive? When Mars has to cheat customers, the answer is “yes.”
