Market Insight Costly cocoa
How commodity trends are shaping Valentine’s Day treats
Nidhi Jain, Commodity Specialist at WNS Procurement powered by The Smart Cube discusses rising cocoa prices driven by climate change, making chocolate a costly luxury, and forcing manufacturers and consumers alike to rethink their sweet traditions.
T 20
he large-scale implications of climate change are well- known. But as the world undergoes extreme weather changes,
even everyday
luxuries are becoming increasingly affected.
This
has become more apparent in the run up to Valentine’s Day as retailers have already begun variety of themed products. However, this year, some couples may be rethinking their sweet treat purchases, as rising prices could make gifting more expensive. For those looking to celebrate without breaking the bank, the outlook for chocolate this February is grim, with the cost of cocoa rising by 30.7 percent in December 2024 alone, after a year of the commodity almost tripling in price. Meanwhile, sugar prices are projected to stabilise, which may offer some relief, though not enough to offset the dramatic price rallies of cocoa.
The cost of climate change
After well over a year of high cocoa and sugar costs, cocoa prices rose to unprecedented levels in December. This was the largest increase in over six decades and was primarily due
In fact, The International Cocoa Organisation 478,000 metric tons (MT) for the 2023–24 season, with end-of-season stocks projected at 1.3 million MT, the lowest levels in 46 years. Now, heading into February 2025, costs are expected to remain elevated due to the ongoing severe droughts in Côte d’Ivoire and Ghana, two of the world’s leading cocoa producers. Both nations account for an estimated 70 percent of global cocoa output. In fact, Ghana’s yield was approximately 430,000 tons lower than usual this past year, about half of its typical supply. The situation was further exacerbated by the Harmattan winds from the Sahara, which can harm cocoa pods and impact their growth. Additionally, the spread of the cocoa swollen shoot virus disease and black pod disease in West Africa has negatively impacted on cocoa
The International Cocoa Organisation (ICCO) had
of 478,000 metric tons (MT) for the 2023–24 season”
Kennedy’s Confection February 2025
production, therefore global cocoa supplies have Meanwhile, sugar prices fell 2% M-o-M in December 2024, globally, on account of a rise in sugar supply from India and Thailand, two key producing regions. With India supplying approximately 34 million tonnes of the commodity, the country claims the title of second-largest sugar producer in the world after Brazil, closely followed by Thailand and China. Combined with a stronger dollar,
this
production increase has pushed sugar prices downwards. Despite a fall in Brazilian sugar output, prices are therefore likely to remain stable in February 2025. However, despite a much more favourable forecast for sugar, this doesn’t necessarily spell a positive outlook for chocolate and remains exceedingly low. With supplies continuing to dwindle, prices will remain high, meaning consumers should still brace themselves for more expensive confectionery, especially this upcoming Valentine’s Day.
With the confectionery industry
KennedysConfection.com
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