Australians are set to feel the pinch of Easter bunny visits as the cost of chocolate rises.
The price of its key ingredient — cocoa — has soared 500 per cent in less than two years.
Cocoa beans shot past US$9,900 ($15,400) a tonne on the New York Futures Exchange this week, making them more expensive than materials such as copper.
Australian chocolate lovers have felt the impact, as prices across supermarkets climbed 8.8 per cent in the past 12 months, according to new data from RaboBank.
So what’s pushing up the price of your chocolate eggs? And are we headed for a chocolate shortage?
Why have cocoa prices jumped?
Chocolate production in West Africa, which accounts for nearly 60 per cent of the world’s supply, has been affected by extreme weather and disease.
RaboBank analyst Pia Piggot said there are several factors limiting cocoa supply.
“There’s been adverse weather, ageing trees and diseases in the cocoa trees, as well as the European Union deforestation regulation,” she told SBS News.
Heavy rains and increased temperatures in Ghana and the Ivory Coast have also led to crop failure and a reduction in cocoa bean yields each year.
Producers aren’t due for a reprieve anytime soon with the resurgence of the El Niño climate phenomenon, which causes drought in some areas and flooding in others.
The International Cocoa Organisation (ICCO) predicts the global cocoa supply will drop a further 11 per cent in the 2023 to 2024 season.
The ICCO estimated there was a global deficit of 74,000 metric tons in the 2022 to 2023 season, which is set to grow to 374,000 metric tons by October.
Your chocolate could get smaller as a result
Increased costs are expected to be passed down to shoppers, affecting Easter chocolate too.
“In Easter, we have seen inflation as well at about 7.4 per cent, so a little bit lower than everyday chocolate but that’s because Easter chocolate is already priced at a higher price point than everyday chocolate,” Piggot said.
“We’ve also in the Easter category where the price remains the same but the volume declines.”
Some of us expect to spend an average of $57 on Easter chocolate this year, according to a survey of 1,061 respondents by comparison website Finder.
It found more than half of respondents were set to purchase the sweet treat.
Chocolate makers set their supply plans for this Easter last year and have said they will hike prices again to cover the cocoa crunch.
The companies face extra pressure on their profit margins as their hedges protecting commodity costs expire later this year and next.
Sydney chocolate maker Arthur Lazour said while the situation isn’t easy for his business, he feels for the farmers doing it “tough”.
“We’ve spent some time in Ghana. Essentially they’re small farmers who make a living from a couple of acres and keep farming the cocoa for nine months of the year. It’s tough,” he said.
He said he’s tried to shield his customers from the price hikes, with his costs rising by around 20 per cent this year alone.
With additional reporting by Reuters
