Chocolate lovers must prepare for significant price increases. This is due, among other things, to a weak harvest of the key raw material. “The cocoa beans from which it is produced are now the most expensive in the history of the Czech Republic, which will cause a significant increase in the price of chocolate and chocolate confectionery in domestic stores,” said economist Lukáš Kovanda. According to him, the situation on the world market is to blame.
According to Bloomberg, cocoa prices have already increased by almost half in the past year. Analysts warn that they will continue to grow.
| Photo: courtesy of Janek Chocolate Factory
The stock market price of cocoa beans is now surging to the highest nominal dollar level in about 44 years. “The increase in cocoa prices is unprecedented and probably non-existent chocolate makerwho would not have felt it,” the spokeswoman of the Czech representation confirmed to Deník Nestlé Tereza Skrbkova. The multinational company has brands such as Orion, Kit-Kat, Milena and Kofila in its portfolio.
According to Bloomberg, cocoa prices have already increased by almost half in the past year. Analysts warn that they will continue to grow. The final price tag chocolates however, they are determined by different factors. However, manufacturers assume that cocoa beans they will remain extremely expensive also in 2024. “This is mainly because West African countries, which provide two-thirds of the world’s supply, are facing a dramatic decline in the bean harvest,” explained Kovanda.
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The world’s largest producer of cocoa beans is Ivory Coast. The country reported a poor harvest due to inclement weather and heavy rains. In addition, foreign experts expect growth in demand for chocolate. The Czech Republic is also recording the trend. According to the data Czech Statistical Office the domestic import of cocoa products increased by half a billion crowns in the first half of the year.
Prices should last until Christmas
Retail chains are also monitoring the situation. “The prices of cocoa beans on the markets have been rising constantly for about half a year, most chocolate manufacturers have therefore already taken this fact into account in the price of their products,” said Penny Market spokesman Tomáš Kubík, adding that the chain is trying to keep the prices of chocolate products in check with, for example, regular promotional offers .
Other traders deal with it similarly. And according to economists the prices are still controlled by the processors themselves. “Processors’ margins are getting thinner. With current inflation, the increased prices of beans and their processing cannot be passed on to consumers as easily as if there was no inflation. Consumers have significantly weakened purchasing power,” says economist Kovanda.
The Czechs thus have little consolation that in pre-Christmas time the chocolate crisis has not fully erupted yet. “Currently, we do not have information from our suppliers regarding price increases for chocolates and chocolate products. For this reason, it can be assumed that sales prices will not increase until the end of the year,” said Renata Maierl, spokeswoman for the Kaufland retail chain.
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However, according to Kovanda, chocolate is showing more and more characteristics of a luxury good, including a higher price and more difficult availability. “Its price is also increasing due to the significant increase in the price of another key ingredient – sugar. Major global manufacturers of chocolate and confectionery made from it, such as the Swiss company Lindt & Sprüngli or the American Hershey, which also supply the Czech market, recently warned their customers that they must prepare for further price increases,” he said.
According to traders, more branded chocolates are sold in the Czech Republic in the run-up to Christmas, and above all pralines. But customers also reach for the private brands of individual chains. “Compared to previous years, we also see a noticeable increase in interest in chocolates with a higher, i.e. seventy to eighty percent, cocoa content,” stated Kubík from Penny Market.
A chocolate gem
– More than 2,500 billion crowns worth of chocolates are produced annually in the world.
– In the past year, the world prices of cocoa, from which it is produced, have increased by almost half. According to analysts, growth will continue in 2024.
– Main reasons include insufficient production as well as likely growth in demand. Harvesting is affected by adverse weather and plant diseases on plantations in West Africa. The largest producer of cocoa beans, Cote d’Ivoire, expects a year-on-year harvest of about 25 percent lower in the starting season of 2023 to 2024. Together with Ghana, they account for roughly two-thirds of global cocoa supplies.
– According to data from the Czech Statistical Office, the average annual consumption of chocolate bars and chocolate confectionery per inhabitant is roughly 6.5 kilograms.