[News Terms] Cocoa Price Surpasses $10,000 per Ton, Triggering 'Choco-flation' Alert

Easter 'Chocolate Egg' Consumer Burden Increases
"If Disease and Bad Weather Persist, Prices May Rise Further Next Year"

'Chocoplation (Chocolate + Inflation)' refers to the phenomenon where the price of cocoa, the raw material for chocolate, rises and fuels inflation. It is a chain reaction derived from the simultaneous increase in prices of related food products such as snacks and cakes that use chocolate as an ingredient.

On the 26th (local time), the price of May delivery cocoa briefly traded at $10,080 per ton (about 13 million KRW) on the New York Mercantile Exchange, according to major foreign media including The Wall Street Journal (WSJ). The cocoa price then reduced its gains and closed the session at $9,622, down 0.28% from the previous day.

Chocolate made from cocoa as the raw material.
[Photo by Asia Economy DB]

The British daily Financial Times (FT) quoted Andrew Moriarty, U.S. commodities director at commodity information provider Mintec, saying, "The market is out of control. Everyone is just bracing for shocks."

This rally in cocoa prices is due to a sharp decline in harvests caused by bad weather and diseases in West African regions such as C?te d'Ivoire and Ghana, which produce 75% of the world's cocoa. Another factor pointed out is that decades of low prices have significantly reduced the investment capacity of local farms, leading them to mainly cultivate varieties vulnerable to pests and extreme weather.

As a result, a global cocoa supply shortage has occurred for three consecutive years, causing unprecedented price increases. Cocoa prices in New York were below $5,000 per ton just two months ago and did not even reach $3,000 a year ago.

Chocolate manufacturers claim that the rise in cocoa prices, their raw material, hits their profits and forces them to pass costs on to consumers. This means chocoplation is becoming full-fledged.

Various Easter eggs. [Photo by Pixabay]

Bloomberg reported that this could be a burden for consumers ahead of Easter on the 31st. Christianity has a custom of sharing egg-shaped chocolates to celebrate Jesus' resurrection on Easter.

Accordingly, demand for chocolate to make 'Easter eggs' is surging mainly in the U.S. confectionery industry. The report stated, "Bakeries in the U.S. are reducing the size of chocolate Easter eggs or promoting Easter eggs made from other ingredients."

Diana Gomes, an analyst at Bloomberg, warned, "If cocoa diseases and bad weather continue amid soaring sugar prices, consumers may have to buy more expensive chocolate next Easter."