Bad news for chocolate lovers in South Africa

South Africans with a sweet tooth are unlikely to find any price relief on store shelves this year as global cocoa prices remain high and are expected to rise further.

Despite headline inflation sticking below the South African Reserve Bank’s 3%-6% target range, food and non-alcoholic inflation rose to 4.0% in April 2025.

This is lower than the SARB’s current 4.5% target but reflects the category slowly edging upward.

Inflation for sugar, confectionery, and desserts was even higher at 5.6%, with tracked pricing for chocolates specifically up 6% year-over-year.

While the increases may seem marginal, the longer-term price increases are more pronounced, with a chocolate slab now costing almost 27% more than it did in 2023, and a chocolate bar up 18.6%

This reflects the continued strain on global cocoa prices, which have been severely impacted by adverse weather conditions in key cocoa-growing regions.

Global cocoa prices have surged almost 300% over the past year, hitting a peak of $12,565 per metric tonne in December 2024.

The global cocoa shortage is being driven by the poor weather and disease that devastated crops in Ghana and the Ivory Coast.

Two-thirds of the world’s cocoa beans are grown in these regions.

While exports from the Ivory Coast increased in early 2025, easing prices, the nation has now signalled a tighter supply, sending futures in the opposite direction.

Analysts have warned that prices are likely to rise further as there are now quality concerns about the country’s mid-crop, which is currently being harvested through to September.

“Cocoa processors are complaining about the crop’s quality and have rejected truckloads of Ivory Coast cocoa beans,” Reuters analysts said.

“Processors said about 5% to 6% of the mid-crop cocoa in each truckload is poor quality, compared with 1% during the main crop.”

The quality is likely tied to late-arriving rain, which impacted growth, and could result in yields dropping 9% from 2024’s harvest.

Chocolate producers plan for the worst, hope for the best

Major confectionery producer Mondelez International flagged the supply issues this week, with an iffy outlook on earnings ahead.

Mondelez is the company behind the Cadbury’s brand, as well as other popular chocolate confectionery labels, such as Oreo.

The group has flagged “unprecedented cocoa cost inflation” in its forecasts and stated that it is preparing for a potential cocoa pricing spike in the coming months.

The group expects global cocoa pricing levels to remain elevated but stable in 2026, while acknowledging that making accurate predictions is challenging.

“Cocoa futures might come down, but we’re not there yet. So we will continue to plan various scenarios with the base case for a continuation of elevated levels,” it said.

“If cocoa stays high, we would expect to gradually price more. If cocoa starts to come down, then we would expect earnings delivery to be higher.”

Other international producers, such as Nestlé, have also floated the possibility of increasing prices due to the cocoa shortage and associated costs.

More locally, Tiger Brands, the owner of Beacon chocolates and the iconic marshmallow easter eggs, has more to deal with than high cocoa prices.

The group is looking to sell its chocolate business altogether, citing a lack of business interaction and investment in the segment for about 30 years.

Beacon has been in South Africa for almost a century, but Tiger Brands admitted not having kept up with changing technology in the sector or interacting with the brand that much.

It stated that it had fallen behind competitors like Cadbury’s and that the brand would likely fare better under new ownership.

Despite this, the group said it would continue to work to turn around Beacon’s operations and support it until the ‘right exit’ comes along.

Wherever the brand ends up next, it will have to deal with the pressure of rising cocoa prices and growing supply issues, which are looking to be settling in for the long term.