A global cocoa shortage will lead to the cost of chocolates skyrocketing at the supermarket checkout as manufacturers look to pass costs on to customers.
A sweet block of chocolate could soon leave a sour taste in shoppers’ mouths at the checkout with skyrocketing cocoa prices set to reach Australian shores.
A global cocoa shortage stemming from disappointing harvests in West Africa, which sources 70 per cent of the world’s cocoa, is triggering price rises in chocolate, according to a report by agricultural lender Rabobank.
“Significantly higher chocolate prices will likely hit shelves over the coming months and going into 2025, providing a major challenge for the chocolate sector, which is already battling a longer-term, structural decline in demand,” the report said.
Commodity prices have hit their highest levels in nearly 50 years as cocoa stocks sunk to their lowest in 22 years, pushing producers and manufacturers to pass on costs to consumers.
Despite prices already increasing, Rabobank’s analyst Paul Joules says the full force of the cocoa crisis is likely yet to be felt on supermarket shelves globally.
Snacks and confectionery year-on-year inflation costs had already increased by 4.6 per cent in the June quarter consumer price index. If combined with the June 2023 quarter, cumulative inflation increases reached 21.8 per cent, according to the Australian Bureau of Statistics.
“Due to the lag in the supply chain and existing contracts, the steepest price hikes are anticipated in the second half of 2024 and into 2025,” Joules said.
“Chocolate manufacturers are struggling with soaring cocoa costs, which are reflected in higher local retail prices for chocolate.”
Manufacturers are also resorting to shrinkflation – reducing package sizes while maintaining prices – and skimpflation – using less cocoa and more fillers – to combat rising costs.
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Consumers are likely to switch between chocolate types and brands, including private or alternative items, which is expected to leave a significant drop in demand, the report said.
The cocoa price shock comes as a government-funded report by consumer advocate Choice found there is almost no difference between grocery prices at the two major supermarkets.
It comes as the Australian Competition and Consumer Commission announced on Monday it will take Coles and Woolworths to court over allegations it lied to customers with misleading specials.