Sweet-toothed shoppers are being warned to expect a rise in chocolate prices heading into the new year due to an ongoing cocoa crisis.
The price of cocoa reached an all-time high in April with a recent report by Rabobank predicting the increased costs will be passed on to consumers by early 2025.
Rhiannon Druce, whose family runs an organic chocolate factory in Junee, NSW, said the industry has been bracing for the impacts of the crisis.
She said the business had slightly increased its prices and would have to reconsider those prices in the new year.
“We do want people to be aware of the price rise of the raw ingredients in general, but to not worry too much about it impacting their Christmas,” she said.
Chocolate prices are tipped to sharply increase into the new year. (ABC: Alys Marshall)
Drop in cocoa production
Rabobank commodities analyst Paul Joules said the crisis was caused by production issues in West Africa, specifically Ghana and Ivory Coast, where 70 per cent of the world’s cocoa is sourced from.
“We’ve seen plant disease, we’ve seen farmers exiting out of cocoa [and] we’ve also seen the trees in general are aging so they’re yielding less cocoa,” he said.
Mr Joules said while cocoa’s commodity price had started to decline he believed “the worst is still yet to come” for consumer prices.
Cocoa commodity prices have increased over the past year, peaking in April. (ABC Landline)
He said this was because big chocolate producers often hedge the commodity, committing to buy cocoa at prices set as far back as 18 months ago.
“There’s a lag between these higher commodity prices and seeing it at the shop floor, but it will catch up,” he said.
Rhiannon Druce at her family’s organic chocolate factory in Junee. (ABC Riverina: Monty Jacka)
Ingredient costs rising
Although the Junee Chocolate Factory sources its cocoa from the Dominican Republic and Vanuatu, Ms Druce said the decreased supply from Africa was having flow-on impacts.
“We never thought it would touch the organic side as much as it has,” she said.
Cocoa is not the only ingredient costing more, with sugar prices also high since the beginning of 2023.
Sugar prices have also risen sharply recently. (ABC Landline)
Ms Druce said every step of the process of producing chocolate had become more expensive.
“There’s a lot of products that are just on the rise in general,” she said.
Lisa Ruffell buys chocolate buds which she then melts and turns into different shapes. (ABC South East SA: Eugene Boisvert)
Concerns about supply shortage
Lisa Ruffell runs a small chocolate shop in the coastal South Australian town of Robe.
While she doesn’t buy cocoa directly, she’s concerned the crisis will affect her supply of chocolate buds to melt down.
Ms Ruffell said she started building up a surplus for Christmas stock two months ago, which she would normally start doing in November.
She said she is yet to increase her prices, but had noticed the increasing input costs.
“We’re still getting the supply, but the price is going up,” she said.
“We’re absorbing the price at the moment, but if it keeps going the way it is … we might have to look at reducing our stock lines.”
Cocoa production in Africa has been impacted by a range of issues. (ABC Local: Roxanne Taylor)
Ms Druce said it was a balancing act between covering costs and not scaring away consumers.
“A lot of chocolatiers have been looking at where’s that sweet spot of trying to predict what the market’s going to do and what the retail market is willing to pay,” she said.
Mr Joules said “sticker shock” may impact sales if chocolate prices significantly increase.
And he said the industry thinks systemic issues in Africa could cause higher commodity prices to stick around.
“It does look like we’re in a higher-for-longer price environment,” he said.
