Sweet Love: Will Valentine's Day chocolates get expensive?

Cocoa prices have surged days before Valentine’s Day (14 February). The cost of the main ingredient in chocolate has been rising for over two years, more than doubling in 2023. The cocoa cost reached an all-time high this month, raising alarm bells among chocolate manufacturers. World cocoa rates saw a new record hike for the ninth consecutive day last Friday, triggering concerns that supply shortages could be prolonged, Reuters reported. Cocoa futures have soared, doubling last year and skyrocketing 40 per cent since January. Why are cocoa prices rising? The extreme weather in West Africa, which houses over 60 per cent of global cocoa production, is being blamed for damaging crop yields. This is creating a cocoa supply deficit and driving the crop prices up. “There were massive rains, and then there was a massive dry spell coupled with wind. It led to some pretty harsh growing conditions for cocoa, including pests and disease,” CoBank senior analyst Billy Roberts told NPR. Climate change is a major risk for the crop. As per data from Silicon Valley startup ClimateAi, shift in climate patterns could lead to a loss of about $529 million in the cocoa bean value chain in Africa, CNN reported. [caption id=“attachment_13722522” align=“alignnone” width=“640”] Cocoa pods are seen at a cocoa farm in Daloa, Ivory Coast 2 October 2023. Reuters (Representational Image)[/caption] Cote d’Ivoire and Ghana in West Africa account for over 60 percent of the world’s cocoa supply. “This past year, drought in West Africa has led to a compression in the volume of cocoa output, and that has significantly increased prices,” Will Kletter, vice president of operations and strategy at ClimateAi, told CNN. Cocoa harvests have fallen for the third year in a row. The International Cocoa Organization’s December 2023 market report attributed the damage to the supply of cocoa crops to black pod disease and swollen shoot virus. The organisation estimates that the global cocoa supply was down by 99,000 metric tonnes in the 2022-23 marketing year, according to I_nvestopedia._ The warm weather brought by the El Niño phenomenon ushered unusual dry weather to the region and is likely to further affect crop produce, reported The Hill.  ALSO READ: Single this Valentine’s Day? 10 exciting ways to enjoy being on your own Will chocolate prices be affected on Valentine’s? Not much. People buying chocolates for Valentine’s Day would not have to shell out higher prices. As per NPR, this is because costs have already shot up steadily for months. Major candy manufacturers, including Nestlé and Cadbury, have been increasing prices. The move comes amid soaring cocoa prices and a rise in sugar and labour costs. Roberts told NPR that with the new cocoa crop not coming for months, chocolate prices could be especially high during Easter and Halloween. Last week, chocolate giant Hershey said that the cocoa price surge will limit its 2024 profit growth. The company also said it will be cutting 5 per cent of its workforce. “Cocoa is expected to limit earnings growth this year,” Hershey’s CEO Michele Buck said on a call with analysts Thursday (8 February), as per CNN. She did not rule out raising chocolate prices in the future. “Given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business,” Buck added. [caption id=“attachment_13722722” align=“alignnone” width=“640”] A mixture of Hershey’s chocolates is displayed in the company’s Times Square store, March 1, 2017, in New York. AP File Photo[/caption] Chocolate retailers in the United States have also increased the prices of the sweet. “Quite honestly, all of our chocolates have increased in price,” Ginger Park, who runs a chocolate shop in Washington, DC, told NPR. “We try not to raise the prices on our customers. But, you know, there are times when we have to — we have no choice.” Roberts, CoBank’s senior food and beverage economist, said in a report earlier in February that retail chocolate prices have seen a 17 per cent uptick over two years and will further rise. “Cocoa prices are hitting chocolate candy manufacturers really hard,” Roberts told CNN. “And it looks like it’s not necessarily going to subside anytime soon.” As per NPR, surveys show consumers have started to switch to cheaper chocolates or limit their purchases. However, retailers still predict that each shopper on average will spend more this Valentine’s Day than the past five years. “Honestly, we have not felt the effects on our customers. And I don’t know if it’s because they know everything has gone up and they understand — or they’re just chocoholics like us,” Park told NPR. With inputs from agencies