Bad news for chocolate lovers in South Africa
Chocolate lovers in South Africa are in for some bitter news, as the cost of their favourite treat is set to climb due to record-high prices for cocoa, chocolate’s main ingredient.
Cocoa futures surged to $11,938 per metric ton in the third week of December, marking an all-time high.
Although the price slightly eased to $11,864, it remains up by an astonishing 180% since the beginning of the year.
This dramatic surge is tied to supply shortages and unfavourable weather in West Africa, the region responsible for approximately 75% of global cocoa production.
The International Cocoa Organisation (ICCO) reported the largest cocoa deficit in over six decades for the 2023-2024 marketing year, citing crop failures in Ivory Coast and Ghana, the world’s leading cocoa producers.
Dutch bank ING noted that while prospects for the 2024/2025 marketing year may improve, persistent weather risks could undermine production levels.
ING’s commodities strategist, Warren Patterson, explained that although West African cocoa output is projected to rise slightly, recent poor weather conditions pose significant risks.
High cocoa prices are likely to persist into next year, keeping demand in check. The price volatility also highlights the fragile nature of the cocoa market, where supply disruptions and climatic changes can have outsized effects on costs.
The cocoa story mirrors another trend unfolding in global markets: the dramatic rise in coffee prices.
Similar to cocoa, coffee’s price surge is fueled by adverse weather and tight supply conditions.
Brazil, the world’s largest coffee producer, has been battling extended dry spells that have severely curtailed production.
Vietnam, another coffee giant, has also faced challenges, exacerbating the global supply squeeze.
The result has been a 70% increase in global coffee prices this year.
Robusta coffee beans reached a 47-year high in August, while arabica futures climbed to $3.1805 per pound, mirroring cocoa’s price trajectory.
The International Coffee Organisation attributes these unprecedented price hikes to poor crop yields, supply chain disruptions, and higher logistics costs.
Local experts are also weighing in on the impact of these trends.
Paul Makube, an agricultural economist at FNB, highlighted that Brazil and Vietnam collectively account for over 70% of global coffee production, leaving the market highly vulnerable to disruptions.
He warned that there is no alternative source capable of making up the shortfall, compounding the crisis.
Wandile Sihlobo, from South Africa’s Agricultural Business Chamber, echoed similar concerns, predicting elevated coffee prices through 2025 as Brazil’s production slump continues.
The sharp rise in prices for cocoa and coffee underlines a broader issue of climate-related risks and supply chain vulnerabilities in global commodity markets.
For South African consumers, this translates into higher costs for everyday luxuries like chocolate and coffee, with no immediate relief in sight.
These developments are a stark reminder of how interconnected global commodity markets have become. Weather disruptions in one part of the world now ripple across supply chains, driving up costs for consumers everywhere.
While producers and traders brace for continued volatility, chocolate and coffee lovers may need to brace their wallets for the foreseeable future.
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