The small pleasure of chocolate is becoming increasingly expensive, with cocoa bean prices hitting a record $12,000 a tonne – a staggering four times last year’s price. And the forecast? They might soar even higher, spelling smaller bars, pricier treats, and recipe changes for consumers. Behind this chocolate conundrum lies a web of issues, as highlighted in a new report from Oxfam. Bad harvests in West Africa, which produces 70% of the world’s cocoa beans, are just the tip of the iceberg. Climate crisis, low farmer incomes, and environmental degradation are exacerbating an already dire situation. The solution? It's time for systemic change. Stable minimum prices, long-term contracts, and a commitment to sustainable and ethical production are crucial. This isn't just about chocolate; it's about lifting farmers out of poverty, combating child labour, and preserving our planet. #FairTradeChocolate #SustainableFarming #EthicalConsumption
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Have you noticed that Easter treats seem pricier than usual? Chances are, it's because of issues in the cocoa supply chain. And that's not the only example - in New Zealand, regular eggs cost more than a dollar each late last year. We take a look at what's happening with these supply chains, and how businesses can manage supply chain volatility. #CocoaPrices #SupplyChainDisruption #Chocolate #Easter cc Chartered Accountants Australia and New Zealand
The impact of rising cocoa costs at Easter
acuitymag.com
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Very good article from Emily Stone about the current #cocoa market context. For guidance, a GBP 300 / now 5% / 80% vol move (daily regular now) would normally represent a yearly market range. “There is indeed a “perfect storm” of variables impacting cacao production, from not-so-temporary climate shocks, to systemic devastating disease, to aging & migrating producers, to limited planting of new trees, to new regulations limiting how land can be converted into new cacao farms, and so on. As I argued in the last post, the externalities and true costs of modern cacao production which have been ignored for decades are coming home to roost. I think we may be looking at a hard reset for cocoa.” Even though I had been #trading cocoa and traveling in cocoa producing countries for years, only after reading "Sapiens, a brief history of humankind" I understood why nothing had and nothing would change in the countries I visited. That requires a much deeper reset, which can't only be established by market forces. It requires a cultural overhaul, rooting out corruption and mismanagement, enabled by education. Good to see you Benjamin Figarede #markets
What is going on with cocoa prices? Part 2
uncommoncacao.com
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It's not the fact that chocolate is becoming more expensive that's important. It's the fact that the rise in prices are caused by climate-disruptions of the Value Chain. Another example of a resource that we take for granted in our Value Chains.... 𝗧𝗵𝗲 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻 𝗶𝘀: 𝗖𝗮𝗻 𝘄𝗲 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗲 𝘁𝗼 𝘁𝗮𝗸𝗲 𝗿𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀 𝗶𝗻 𝗼𝘂𝗿 𝗩𝗮𝗹𝘂𝗲 𝗖𝗵𝗮𝗶𝗻𝘀 𝗳𝗼𝗿 𝗴𝗿𝗮𝗻𝘁𝗲𝗱? 🔰 𝗙𝗮𝗰𝘁𝘀: According the Financial Times (link to article below) poor weather in Ivory Coast and Ghana, which together produce around two-thirds of the world’s cocoa beans, has affected crop yields. El Niño, the sea temperature phenomenon which occurs every three to five years, returned last year, first bringing unseasonal heavy rainfall to the region and then dry heat. The result is a global crop 11 per cent smaller than last year’s season, according to forecasts published by the International Cocoa Organization. 🔰 𝗡𝗮𝘁𝘂𝗿𝗲 𝗽𝗼𝘀𝗶𝘁𝗶𝘃𝗲 - 𝘄𝗲 𝗻𝗲𝗲𝗱 𝗮 𝘁𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻 Natural resources are the basis on which all economies and societies are built, making their sustainable management critical to ending poverty and reducing inequalities. They are also essential to drive the transition to nature positive. To stay below a 2°C temperature rise by 2050, we will need over three billion tonnes of energy transition minerals and metals for wind power, solar and more. Aiming for 1.5°C to maximize climate justice would mean even greater demand. Right now, however, resources are extracted, processed, consumed and thrown away in a way that drives the triple planetary crisis – the crisis of climate change, the crisis of nature and biodiversity loss, and the crisis of pollution and waste. We must start using natural resources sustainably and responsibly. https://lnkd.in/dHyc6K8b #regeneration #sustainability #valuechain
Why the cost of chocolate will keep rising
ft.com
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Chocolate Crisis: The Impact of Rising Cocoa Prices on the Industry The chocolate industry is facing big challenges due to soaring cocoa prices, driven by poor harvests in West Africa, the heart of global cocoa production. This issue is creating ripple effects across the entire supply chain, affecting manufacturers, consumers, and the future landscape of chocolate. Manufacturers are facing increased production costs, compelling them to either absorb these expenses, reduce product sizes (shrinkflation), or pass the costs onto consumers. This scenario puts significant pressure on profit margins and necessitates innovative approaches to maintain profitability without compromising quality. Consumers might experience noticeable price hikes or reduced portion sizes, which could alter purchasing habits and impact overall demand. As chocolate becomes a more expensive indulgence, consumers may turn to alternative sweets or premium products, reshaping market dynamics. Sustainability is at the forefront of the industry's response. Ensuring a stable and ethical cocoa supply chain involves investing in better farming practices, supporting cocoa farmers with fair wages, and promoting agroforestry. These steps are crucial for long-term viability, but require substantial commitment and collaboration among all stakeholders. What are your thoughts on potential chocolate price hikes? How can the industry ensure a sustainable cocoa supply chain? Let's discuss the future of this beloved treat. #chocolate #cocoa #supplychain #agriculture #sustainability #foodindustry
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The #cocoa industry is experiencing significant shifts as cocoa prices soar, impacting cocoa growers, processors, and chocolatiers differently. This raises critical questions about #equity and #sustainability in the cocoa supply chain.
Sweet Profits, Bitter Reality: Who gains the most from the cocoa price surge?
economictimes.indiatimes.com
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🍫📈Will Chocolates get unaffordable 😧 For the third year in a row, cocoa production in Africa has been on the decline, leading to record-high cocoa prices 🌍🍫 Reaching their highest level in 45 years! 💰💥 Read on to know how badly this could impact the price of your beloved chocolates? 🍫 Are you seeing prices go up around you? Share your insights in the comments below! 💬 #CocoaCrisis #ChocolateShortage #ClimateChange #SweetSolutions
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Issues around chocolate production have been building for some time. Productivity has been declining due to soil degradation, aging of farmers and aging out of family labor, cost of fertilizer, and conversion of some fields to rubber and other more valuable crops. Production has been maintained by expansion of plantings into protected areas, smuggling of cocoa across the border, and the use of child and bonded labor. I wonder, though, if something else might be pushing prices up. Not many years ago, there was reportedly a stockpile of cocoa beans in Europe that was large enough to flatten the most extreme price spikes. However, as productivity has declined and consumption has expanded in Asian markets, prices are rising. I wonder if there may not be some stockpiling taking place. The EU Deforestation Regulation is set to go into effect at the end of 2024. Cocoa takes 18 months to get to market; it is all grown by small farmers in West Africa with the cocoa mixed by the thousands of buyers who purchase on farm or from small farmers. It will take some time to sort out these supply chains and a whole lot of cooperation on the part of the aggregators and traders. There is a first time for everything, I guess. It might still be good to lay in some stores of chocolate just to be safe.
Why the cost of chocolate will keep rising
ft.com
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The #cocoa industry is experiencing significant shifts as cocoa prices soar, impacting cocoa growers, processors, and chocolatiers differently. This raises critical questions about #equity and #sustainability in the cocoa supply chain.
Sweet Profits, Bitter Reality: Who gains the most from the cocoa price surge?
economictimes.indiatimes.com
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🌍 Understanding the Global Cacao Market and its Dynamics The global cacao market is at a crossroads in 2024. As cacao prices soar due to increased demand and climate challenges, West Africa continues to dominate production. Yet unpredictable weather and supply chain disruptions are shaking up the industry, making it difficult for many chocolate producers to secure sufficient supply. Why does this matter? Rising prices are the direct result of years of sluggish crop extension. Farmers had little to no incentive to invest in their crops as market prices barely covered the subsistence level. If you wish to read further, find our blog article on the state of the global cacao market here: https://lnkd.in/dJdpwVPp To pave the way towards a brighter future, now is the time for companies to invest in resilient farming practices and transparent, fair supply chains. As consumer awareness grows, there's a clear demand for ethically sourced cacao - we will cover this topic in our next blog article, so stay tuned! If you are interested in sourcing ethically traded, fine cacao from IKAT, you find more information on our product range on our B2B website: https://lnkd.in/dc8DUf4R Join the movement to create a sustainable and ethical future for cacao! 🌱✨ #CacaoMarket #Sustainability #SustainableFarming #FairTrade #EthicalBusiness #FoodIndustry #CacaoRevolution
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Pick of the Day (courtesy FoodNavigator) Not sure I agree with this article, I think we are spectators to a classic short squeeze. Ghana has sold its production forward only to realize that the harvest is much less than anticipated. In order to deliver upon their contracts, they need to buy what they don't have... Sad story as producers, farmers seem to always be on the wrong side of the knife. There isn't any obvious solution, either you break the markets that oil the system or you maintain the status-quo but similar situations will keep on happening time and time again. Foodtech start-ups are working on alternative and cultivated cocoa and coffee, eventually these will become a reality. Furthermore, simpler to crack than meat, higher price per kg, less regulatory and lobbyists to overcome. #foodtech #cocoa #sustainability
Future of cocoa under threat as prices skyrocket due to bean shortages
foodnavigator.com
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