Community News
Chocolate Lovers: you might have to start rationing your chocolate intake
BY SIMONE J. SMITH
I stood with a friend in the chocolate aisle, staring at the shelves filled with various chocolate products. A price tag caught my eye, “Look at this, girl!” My friend took a look, and instantly, her expression mirrored mine.
“Unbelievable. It’s like daylight robbery!” I reluctantly picked up a smaller bar of chocolate, clearly debating whether it’s worth the higher price. “Yeah, it’s crazy! I used to buy chocolate bars without a second thought, but now…”
Did you guys notice how expensive those chocolate eggs were this Easter? Absolutely! Many had to cut back on how much they bought for their children. I have even heard parents talking about adjusting their budgets for next Easter. If you can believe it, the rising cost of chocolate is actually putting a strain on finances, amongst everything else.
North Americans and Europeans noticed the uptick around Easter, when the prices of popular chocolate products were up as much as 50%. Some analysts suggest chocolate may end up a luxury product, at least for the near future, as sellers like Hershey (Oh no! I love my Kisses) and Mondelez raise prices.
In March, cocoa futures reached 12k per kilogram, or 12m naira per metric ton (~$9.6k), more than three times its price in the last quarter of 2023 and nearly five times more than in the last quarter of 2022.
For farmers in West Africa, where the majority of the globe’s cocoa is grown, the higher prices have been a mixed blessing. While rejoicing over the soaring rates, they’ve been held back by severe weather, rising rents, and government price regulations. Some farmers have invested in their farms, hoping the record prices will continue for this fall’s harvest.
In 2022, Russia’s invasion of Ukraine led to roughly half of Europe’s fertilizer production going dormant. Fertilizers became cost-prohibitive to most West African farmers who stopped using fertilizer completely.
At the same time, radical weather patterns didn’t help. El Niño brought heavy rainfall followed by heat and drought, which absolutely devastated cacao trees. Cacao trees grow fruits called pods that are filled with cocoa seeds (or beans) that can be processed into chocolate.
By early 2024, months after the fall harvest, it became clear farmers had far fewer crops than normal. Compared to the originally predicted output for the 2023-24 season, cocoa production is expected to fall by:
- 40% in Ghana
- 30% in Nigeria
In Côte d’Ivoire, the first quarter output this year was 29% lower than the same period in 2023. One farmer in Nigeria ended up yielding two metric tons of cocoa last year, about one metric ton less than normal. “You work the same, the trees just yield less,” Olowolagba Rafiu shares.
In 2023, cocoa sold at an estimated 50% more than it had the year before in Nigeria, but the increase wasn’t enough to protect farmers from the country’s severe inflation and economic malaise. By the time farmers are done tending to expenses and getting ready for a new growing season, many of them do not have any expendable income left.
Countries like Cameroon and Ghana set fixed prices for cocoa farmers called farm gates. When prices are low, these measures help protect farmers, most of whom do not earn a living wage in Ghana. The farm gates were set before the market spiked, with prices for farmers in those countries at about one-third of what cocoa fetches on the open market.
On top of that, rent and property rates have increased.
In the past years, Olowolagba Rafiu has paid an annual rent of 150k naira (~$120) on three hectares of farmland. This year, his landlords asked for 500k naira, and he was able to negotiate down to 350k. Baba typically pays a tax of 30k naira on his land; this year he’ll be paying over 100k naira.
To add to the drama, during last year’s harvest season, theft got so bad that farmers in some communities set up security task forces to prevent pods from being stolen directly on trees in the forests. Some farmers would come out to their fields in the rising and find all your trees stripped bare.
I know, right? I might have to start rationing my chocolate intake.
REFERENCES:
https://www.linkedin.com/pulse/high-cocoa-prices-unsustainable-especially-people-who-jxube/