Bad news for South Africans who love chocolate

Cocoa prices have hit an all-time high of over $10,000 (R190,000) per metric ton, further driving up the price of chocolate worldwide.

In 2024, cocoa prices increased from $4,200 a ton on 2 January to $10,030 per ton on 26 March. It is the first time the commodity broke above the $10,000 mark.

The high prices are caused by poor harvests in top-producing countries in West Africa, including the Ivory Coast and Ghana. This area produces about 70% of the world’s cocoa.

The poor harvests, in turn, were caused by difficult weather conditions and disease. It included heavy rains, dry heat, and black pod disease.

Casey Sprake, an investment analyst at Anchor Capital, told The Money Show the cocoa shortage is related to sustainability issues.

She said that apart from impacting chocolate prices, cocoa production is a core part of the Ivory Coast and Ghana’s economies.

“The cocoa shortage is a serious issue and will have knock-on effects right through the supply chain, including local economies and regional economies,” she said.

Rising cocoa prices have already caused chocolate prices to increase globally, and this trend is set to increase.

In July 2023, De Villiers Chocolate co-founder and owner Pieter de Villiers said their input costs increased significantly because of higher cocoa prices.

He said it was hurting South African chocolate manufacturers and that the high costs had to be passed on to consumers.

“I buy a container typically every three months, and we typically see an increase in the cocoa price,” he said.

“If you take the impact of the increased cocoa price in conjunction with our own currency, we’re sitting with an excess of 60% increase just on cocoa between last year and now.”

More recently, Mondelēz South Africa, which makes Cadbury’s chocolates, said it was planning to hike prices to compensate for record-high cocoa prices.

Nestlé’s East and Southern Africa business executive officer Zumi Njongwe echoed these views in an interview with Mail & Guardian.

“With cocoa prices hitting record highs, chocolate manufacturers are facing significant cost pressures which will result in price increases as we look to offset other input costs,” she said.

In South Africa, the situation is aggravated by higher sugar prices, sugar taxes, load-shedding, and logistics constraints.

South African chocolate lovers should, therefore, brace for even higher chocolate prices as these constraints persist.

Cocoa price increase

The chart below, courtesy of Trading Economics, shows the metric ton price of cocoa over the last four years.