Buckle up UMass Boston chocoholics, and brace yourselves for a bitter truth—your next chocolate purchase might leave your wallet feeling a little lighter. In recent times, chocolates have quietly become pricier, and with the global market showing no signs of slowing down, they are going to become even more expensive. So, the question is: Why is it that we haven’t noticed up until now?
A chocolate crisis has been brewing for a while now, with producers initially shouldering the burden of rising costs. Despite a staggering 40 percent surge in the prices of cocoa between October 2022 and June 2023—reaching a 46-year high on the International Exchange in London, according to Time [1]—retail prices only rose by an average of 10 percent.
This initial absorption of escalating costs by producers prevented consumers from feeling the impact of the volatile market. However, driven by the pursuit of profitability, companies have gradually shifted more of these costs onto retail chocolate prices.
Two primary causes for this crisis have been identified. Firstly, the Russian invasion of Ukraine has played a significant role. Following the invasion in February 2022, Time also reported, [1] the prices of coal, gas and oil surged. European chocolate manufacturers, anticipating operational changes due to potential disruptions in energy supply, reduced their orders for cocoa in response.
While the Russian invasion undoubtedly contributed to the crisis, its impact is overshadowed by the second major factor: natural events affecting cocoa plantations. According to World Atlas, cocoa production is heavily concentrated in West African countries, with the Ivory Coast accounting for over 90 percent of the global cocoa production. [2] However, in recent years, the cocoa beans have been plagued by diseases and adverse weather conditions, hindering their growth.
These cocoa-producing countries are experiencing El Niño climate conditions, characterized by hotter and drier weather, further impeding crop development. Given these challenges, it can be argued that regardless of the decisions made by European chocolate manufacturers, a global cocoa shortage was bound to happen.
In addition to these major causes, the situation seems to be one where the principles of demand and supply come to play. If you ever took an introduction to microeconomics class, a little throwback would remind you that when there is significant demand for a commodity such that it outweighs the supply, the price of the commodity is bound to rise. This holds true in this situation. Demand for chocolates remains high, but supply is becoming more constrained due to various factors outlined earlier, forcing an increase in price.
What this means for UMass Boston students and chocolate lovers is, if current trends persist—as they are likely to—we can expect chocolate prices to continue climbing. It is projected that the cost of chocolates from major brands will continue to reflect the challenges faced by the cocoa industry. Therefore, if you were thinking of gifting someone a pack of chocolates for a gift, it might be a prudent decision to make the purchase sooner rather than later.
On the bright side, the situation is not entirely negative. While there is no indication that cocoa prices will decrease anytime soon, according to ABC News, cocoa farmers are experiencing the positive effects of the price surge. [3] A significant portion of the profits made from exports of cocoa goes to these producers, affording them greater opportunities to invest in their own well-being and improve their standards of living.
The brewing chocolate crisis, like any other economic phenomena, is a complex interplay of geopolitical events, natural phenomena and economic principles. UMass Boston students, along with other consumers, will feel the pinch in their wallets. However, amidst these challenges lie an opportunity for awareness and action. By supporting sustainable practices that address issues such as the El Niño climate condition, we can contribute to positive change in the cocoa industry and beyond.
[1]Chocolate Prices Have Been Rising in 2023. Here’s Why | TIME
[2]The Top Cocoa Producing Countries In The World – WorldAtlas