The Easter bunny may or may not be responsible for the latest rise in cocoa prices that is making chocolate more expensive. Cocoa futures have risen sharply in recent weeks, surpassing $3,000 a tonne to reach new two-month highs. Even cocoa exchange-traded notes have seen their price surge recently on higher demand for chocolate ahead of the Easter holiday on March 27.
The Choc-apocalypse
The arrival of Easter can only mean one thing: the choc-apocalypse is upon us. This might be hard for some people to grasp or even accept, especially those of us who have grown accustomed to feasting on chocolate eggs for Easter. But it makes sense, if you think about it. Our insatiable appetite for Easter eggs and other sugary treats, especially around the holiday season, is creating a massive shortage of cocoa, the delectable ingredient that gives us chocolate. After all, cocoa’s scientific name is Theobroma, which literally translates as “food for the gods.”[1] Perhaps now you’re beginning to see why we’re headed for a choc-apocalypse.
A professor at the University of Leeds in the UK has been among the first in documenting the chocolate apocalypse.
“Demand for cocoa is growing fast and it is not clear what stocks are held across the world,” says Professor Tim Benton of the University of Leeds. “This creates a recipe for price uncertainty. This can drive up prices, lead to panic buying and create the potential for a price spike.”
We’ve all had our episodes of cholate panic-buying, but the other stuff Professor Benton says is pretty important, too.
“If there is a bad production there is scope for a ‘choc-apocalypse,” he added in a recent report on the state of the global cocoa industry.
Those of us going Easter shopping in the next few weeks will certainly experience a tighter chocolate market. Be prepared to pay accordingly.[2]
Don’t Just Blame the Easter Bunny
While the Easter bunny may be behind the global conspiracy to limit cocoa production and drive up prices for Easter eggs, that’s just one side of the equation. Worker shortages and political upheavals in West Africa, which produces about 70% of the world’s cocoa beans, are also a big part of the problem.
David Guest, professor of plant pathology at the University of Sydney, told the Observer last year that rising chocolate costs are inevitable.
“You need to look after these trees properly, which requires labour. And labour shortages are a real problem in the cocoa-growing areas because of a drift of young people to the cities and people suffering from poor health,” he said.
At the end of the day, “We are not making enough cocoa,” added Angus Kennedy, editor of trade magazine Kennedy’s Confession.[3]
A Closer Look at the Numbers
If you doubted humanity’s love for chocolate, the following numbers should set you straight. All figures are from 2011.
Cocoa Butter Imports (nominal value in $1000s)
- Germany: 464,280
- United States: 453,387
- Netherlands: 414,183
- Belgium: 363,808
- France: 276,581
Cocoa Powder and Cake Imports (nominal value in $1000s)
- United States: 781,154
- Spain: 271,419
- France: 265,065
- Germany: 258,995
- Netherlands: 239,136
Cocoa Paste Imports (nominal value in $1000s)
- Germany: 356,263
- France: 351,436
- Netherlands: 350,070
- Belgium: 220,884
- Russia: 167,643[4]
Surviving the Chocolate Deficit
With demand for cocoa at an all-time high, consumers may have to satisfy their sweet tooth in another way or be prepared to pay more for their favourite chocolate treats. Given that the typical Western consumer eats 286 chocolate bars a year, this presents a problem.[5] In addition to these consumers, more than a billion people from developing countries such as China, Indonesia, India and Brazil are consuming chocolate in greater quantities.[6] Current production methods simply don’t allow for such demand to be met in a sustainable manner.
The first step in surviving the chocolate deficit is realizing that cocoa is subject to the same forces of supply and demand as everything else. This may seem like an after thought now, but you’ll grow to appreciate it when your favourite chocolate bar costs twice as much as it does now. That reality isn’t far off, as industry experts say that global chocolate prices are set to double by 2020.[7]
If this realization doesn’t help you cope with less chocolate, consider snacking on celery sticks. After all, if you replace those 286 chocolate bars with 286 celery roots you’ll save – wait for it – 125,840 calories a year.
[1] Investopedia. Commodities: Cocoa.
[2] Robin Cotte (February 16, 2016). “Chococalypse: Easter egg prices set to soar as cocoa demand booms.” Daily Star.
[3] Camilla Turner (April 5, 2015). “Easter eggs could become a luxury as chocolate prices are set to soar.” The Telegraph.
[4] World Cocoa Foundation (April 1, 2014). Cocoa Market Update.
[5] Alexander Robertson (February 13, 2016). “The world is running out of CHOCOLATE: Soaring demand and slowing production are combining to put sweet treats at risk.” Daily Mail.
[6] Hannah Stubbs (February 13, 2016). “Terrible news for chocolate lovers as experts claim world running low on cocoa.” Mirror UK.
[7] Samantha Turnbull (April 2, 2015). “Chocolate prices to double as world runs out of cocoa.” ABC North Coast NSW.
