Easter eggs and chocolate letters are becoming more expensive due to high cocoa prices

NOS News•today, 8:33 PM

The price of cocoa continues to rise. The raw material for chocolate has even become more expensive than copper. That is bad news for the chocolate letters that will be made in the near future and possibly also for next year’s Easter eggs.

The increase in the cocoa price is partly due to the poor harvest in West Africa, where 70 percent of the cocoa comes from. There have been many temperature fluctuations and heavy rains in the past three years, which is bad for growing the raw material.

In addition, cocoa farmers have been living in poverty for years. As a result, they cannot invest in the plantations to better protect the cocoa trees against weather extremes.

Due to the problems, the demand for cocoa is now greater than the supply and so the price is shooting up. It has doubled this year and has again risen by 50 percent this month.

The price is currently above 9,000 euros per tonne. That’s a record:

Other raw materials for chocolate also fluctuate in price. “Cocoa is now rising sharply, but sugar has also become a lot more expensive,” says Thijs Geijer, economist at ING. Milk, another important raw material for a lot of chocolate, has actually become cheaper.

In addition, the demand for chocolate has grown in recent years. “This is because the population worldwide is growing in prosperity,” says Geijer. “That demand is growing faster in Asia than in Europe, because there are more emerging economies there. Europe remains the most important market for chocolate.”

More than half of farmers do not benefit from the rising cocoa price, says researcher Yuca Waarts of Wageningen University & Research. “Because they cannot make investments due to their persistent poverty, they have been harvesting little cocoa for some time. And climate change is now on top of that.”

In the two largest cocoa producing countries, Ghana and Ivory Coast, the market is regulated by the government. They make agreements with farmers about the cocoa price. “The rate will be announced in September. The cocoa price has risen considerably since then, but the farmers will not notice this because they are still stuck with the September 2023 rate,” says Waarts.

The new rate for farmers will be announced in six months. That will probably go up. Waarts says that every increase helps, but it remains to be seen whether that will get them out of poverty. “There is enormous inflation in Ghana and Ivory Coast, which pushes them even deeper into poverty. The question is how they get out of there.”

The fact that the price for cocoa is now rising sharply is not even noticeable with the current Easter eggs, because they were made months ago. “The price was lower then than it is now,” says Guido Rousseau. He is director of chocolate maker Rousseau, with several branches in Limburg and Brabant.

But for Sinterklaas and Christmas the market becomes a lot more uncertain. “Normally you are covered with your price for a year, but it is now a waste of money,” says Rousseau.

The chocolate industry says there is more to it than just a bad harvest. “There is speculation with cocoa: companies buy it, hold it and sell it again at a certain point in order to make even more profit,” says Toon van Dijk, director at Jamin.

The chocolate sellers therefore fear for the coming winter season. “Chocolate is a luxury good. When the economy gets tighter, you notice this more quickly as a chocolatier,” says Jarno Capsers of ChocoGuru. “Consumers are then less likely to buy a bar of chocolate.”