Chocolate Prices Soar, Challenging Businesses

“The price of chocolate has gone through the roof… and it’s really hard to manage,” stated the founder of an online bakery. Katie Cross, who operates Cake or Death from her establishment in Exeter, Devon, disclosed that she is now paying £9,000 more per tonne of chocolate than she was a year ago. Over the last 12 months, the wholesale cost of cocoa has quadrupled, creating a difficult period for small enterprises. Climate change was identified as one of the elements affecting cocoa harvests in West Africa, leading to price increases due to reduced supply. Prices peaked on the London Cocoa Futures in April, reaching £9,648 a tonne. As a smaller buyer, Ms Cross explained that she could not access the more economical wholesale rates. “In 2023 we were paying about £5,500 a tonne and by the end of June we were needing to pay almost £15,000 a tonne, which is obviously a massive increase,” she said. Consequently, Ms Cross indicated that she would need to cease purchasing chocolate in bulk to alleviate pressure on her firm’s cash flow. She has also begun producing non-chocolate items such as flapjacks and mentioned a “little bit” price increase at the start of the year. “I really don’t want to put prices up again,” she said.”We are selling a luxury product and the prices are fair as they are and I think that customers are really under pressure at the moment with bills so I am just looking at cost savings I can make elsewhere in the business.” Cocoa prices have been driven upward by poor harvests in West Africa, which accounts for the majority of the global supply. The El Niño weather phenomenon has been causing drier conditions in Ghana and Ivory Coast, the world’s two largest producers of cocoa beans. “We’ve seen a four-fold increase in the price of cocoa in the wholesale market recently,” said Prof Dan Bebber, from the University of Exeter.”We’ve seen this heating and drying trend and that may lead us to think that actually climate change is driving these increasing prices by reducing the yields of cocoa.” “As with all food commodities, if more people want the commodity and there’s less available, the price will go up and obviously the world has an insatiable demand for chocolate.” Cornwall chocolatier Josh Parker reported that the price instability compelled him to postpone a planned investment in his business. “With the volatility of the cocoa commodity prices, we felt as a business it wasn’t the right time to be making those kind of investments with the uncertainty that was surrounding the market,” he explained. The founder of Josh’s Chocolate, situated at Callestick Farm near Truro, noted a steady increase in cocoa prices since Covid, but highlighted 2024 as having the most significant jump. “This year we’ve seen a real pressure and spike,” Mr Parker said.”Some of our purchase lines are up between two and threefold, 190-200% up on the same time last year.” Although prices have decreased since April, Ms Cross stated that her business had not yet experienced any savings. “We understand wholesale prices are coming down but we haven’t seen a decrease in the price we are paying at all,” she said.”In fact, we are being told to feel grateful it isn’t going up again.”