Current Cocoa Supply Chain Issues Are Just the Start of a Problematic Future for Chocolate3/25/2024
AUTHORLiam Ripberger, RUSCA Blog Committee For centuries now, chocolate has been one of the most essential ingredients for many of the world's favorite treats. However, recent trends in cocoa prices shine light on the dire cocoa supply chain issues. Going into February of 2024, cocoa prices are at the highest we have seen in 46 years. According to CoBank, an agricultural financing company, these price highs for chocolate are approximately 65 percent higher than they were around the same time last year (Zimmerman). Chocolate prices have been steadily rising for the past three years, with this year being the worst yet so far for supply issues. This year's yield is projected to be worse than last year in Ghana, where the yields for cocoa were the lowest they have been in the past 13 years (Zimmerman).
Although these supply issues have already created record high chocolate prices, the average consumer has not yet seen the worst of the price hikes. According to Matt Spooner, a supply chain management specialist for Kinaxis, the prices will be realized by consumers a bit later in 2024 (Casey). Consumers may not have noticed the price changes yet, because many of the chocolate goods for Valentine’s Day, and this upcoming Easter have already been manufactured and shipped to the shelves. Therefore, as cocoa supplies run out before the next cocoa harvest later in the year, chocolate will rise exponentially as we inch towards the holiday season late in 2024. Spooner believes that, “Maybe by reducing the actual size of the bars of chocolate, what the consumer sees is mitigated a bit, so you’re not seeing that the price of cocoa for the producer is up fifty-percent,” (Casey). These high costs could lead large chocolate companies to cut jobs, something that Hershey has already announced. In order to understand why all of this is happening, it is important to get to the root of the issue, which is the cocoa tree. Just like many other crops, cocoa trees are struggling to acclimate to the effects of climate change. The overwhelming majority of cocoa supply, roughly 70 percent, comes from different areas in West Africa (Zimmerman). However, erratic rainfall has been terrorizing the region, resulting in lots of flooding, and even extended droughts. This is incredibly detrimental to the agricultural output of the area. On top of this, areas like Ghana have been struggling with black pod disease, which, according to the Ministry of Agriculture, is a fungal disease that preys on cocoa (Seedial). This disease thrives in rainy seasons, which is a lethal combo for cocoa trees when paired with the recent rainfall in Ghana and other parts of West Africa. These past few years have seen rising supply chain issues surrounding cocoa farming, which raises the question of longevity for the industry. According to scientists from the National Oceanic and Atmospheric Administration, cocoa trees are on track to go extinct by 2050 (Sherman). This is because of the way climate change is impacting West Africa, making about 89.5 percent of the land currently being used for cocoa harvesting go sour by 2050 (Sherman). Though this is scary for the future of chocolate, researchers at UC Davis believe that with their partnership with Mars, Wrigley, there is still hope for the cocoa trees. Being one of the largest chocolate manufacturers and distributors, Mars is investing a lot of money into researching cocoa trees. They intend to focus on solutions that will help the plant withstand climate change and overcome diseases. Davis Alan Bennett, a professor of plant sciences for UC Davis, is incredibly confident in the future of chocolate production, stating that: “chocolate is not going anywhere [...] I think it still has a bright future,” (Apodaca). Right now the price of chocolate is at a record high and still rising, affecting everyone along the supply chain from manufacturers to customers. Whether or not cocoa trees will survive the impact of climate change is unknown, and for now all we can do is hope for the best and savor chocolate while we still can. Sources: “Cocoa supply issues could lead to smaller chocolate bar sizes: expert” https://www.supplychaindive.com/news/cocoa-supply-smaller-chocolate-bar-sizes-kinaxis-ivory-coast-hershey-mondelez-easter-candy-prices/707464/ “Surging cocoa prices could lead to Valentine’s Day sticker shock” https://www.fooddive.com/news/chocolate-prices-rise-africa-cocoa-supply-cobank/706762/ “Could research being done at UC Davis save the future of chocolate? Mars Wrigley is betting on it” https://www.cbsnews.com/sacramento/news/saving-chocolate-mars-wrigley-researching-cacao-at-uc-davis/ “Scientists Expect Chocolate to Go Extinct by 2050” https://www.foodandwine.com/news/scientists-expect-chocolate-extinction “Black Pod Disease of Cocoa” https://agriculture.gov.tt/wp-content/uploads/2017/11/Black-Pod-Disease-of-Cocoa-pdf.pdf Comments are closed.
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