Today in not-so-sweet news, the price of your favourite grocery impulse buy is on its way up.
Driving the news: Cocoa prices have been steadily climbing as the demand for chocolate’s main ingredient outstrips supply. Cocoa futures—the pricing mechanism used to determine what to pay cocoa farmers—are up ~21% so far this year.
Why it’s happening: Cocoa production has fallen as the Ivory Coast and Ghana—which together account for ~60% of the world’s production—after experiencing the driest soil conditions in over a decade, and now fighting heavy rains that could delay harvests.
- The upcoming El Niño—a cyclical warming weather event in the tropical Pacific Ocean that could help set a record for the hottest year—will only make things worse.
Why it matters: Cocoa prices are the main factor for chocolate prices. With this surge expected to last into 2024, plus rising sugar costs, chocolate will get pricier. Do you like chocolate? Chances are you do, as Canada is the world’s ninth-largest chocolate consumer.
Canada consumes 6.4 kilograms of chocolate (read: 160 chocolate bars) annually per person, according to the Inter-American Institute for Cooperation on Agriculture.
Bottom line: Canadian demand for chocolate was on the rise last year but could soon see a steep drop off as consumers looking for grocery savings balk at pricier Snickers bars.—QH