Rising Cocoa Prices: El Niño and Climate Change Add to Pressure on Chocolate Manufacturers

Fazer seeks alternatives as cocoa prices soar

In recent years, adverse weather conditions have devastated cocoa crops in Africa, leading to a surge in prices globally. The price of cocoa has soared past $10,000 per ton for the first time ever, with cocoa futures prices rising by 60% in New York this month and more than doubling this year. The main reason for this increase can be attributed to the El Niño weather phenomenon, which has brought heavy rains to the region and exposed cocoa trees to diseases, causing beans to rot on the trees.

The impact of climate change on cocoa growers is exacerbating these challenges, with El Niño becoming stronger. To respond to the rising cocoa prices, chocolate manufacturers have implemented various strategies. Some have increased prices, while others have reduced the size of their products without changing the price. Finnish company Fazer has also raised prices due to the cocoa price hike and is exploring alternative raw materials to replace cocoa.

Fazer is researching potential substitutes for cocoa and experimenting with cereal-based chocolate bars. While they aim to maintain product quality, they are also looking at cost-saving measures. The company is preparing for various future scenarios as they navigate the challenges posed by the cocoa price increase. Despite efforts to mitigate the impact of rising cocoa prices, operators are monitoring the autumn cocoa harvest to determine future supply availability. High cocoa prices may eventually be passed on to consumers, affecting their purchasing decisions. As the industry grapples with ongoing challenges, there is a need for innovative solutions to adapt to the changing landscape.

Cocoa crops in Africa have been hit hard by heavy rains followed by droughts that have affected global prices of this precious commodity. Cocoa futures prices have surged recently due to adverse weather conditions in Ghana and Ivory Coast caused by El Niño weather phenomenon.

The El Niño weather phenomenon has resulted in heavy rains exposing cocoa trees to diseases and causing beans to rot on them.

This was followed by exceptionally dry conditions that impacted cocoa production even more.

To respond to rising cocoa prices, chocolate manufacturers are implementing different strategies such as increasing prices or reducing product sizes without changing their prices.

One such company is Fazer from Finland who raised their product price due

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