Over the past year, world prices for cocoa beans have increased by more than 80% and in January 2024 they reached a nearly half-century high. This is evidenced by data from the international exchange ICE.

The peak value was reached on January 25, when the cost of one ton of raw materials rose above $4.8 thousand. Previously, a similar level could be observed in the summer of 1977.

Now the quotes have adjusted somewhat and fluctuate around $4.7 thousand per ton. However, analysts do not rule out another wave of rising prices for goods in the near future.

“The sharp increase in world prices for cocoa is associated with the continuing shortage of this product on the world market and the increase in the cost of its transportation... Under these conditions, by the end of 2024, quotes may increase by another 25-30%,” Freedom Finance Global analyst told RT Vladimir Chernov.

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Global cocoa production has not kept pace with demand for two years. At the same time, in the current agricultural year (started on October 1, 2023), the situation is unlikely to change and the global shortage of goods is almost guaranteed to continue. This conclusion was reached by experts from the International Cocoa Organization (ICCO).

One of the main reasons for the product shortage on the world market was unfavorable weather conditions in the main producing countries - Côte d'Ivoire and Ghana. This point of view was expressed in a commentary to RT by the executive director of the ASKOND Association of Confectionery Industry Enterprises, Vyacheslav Lashmankin.

“These African countries account for about 65% of the world’s cocoa production, and any climate change on the continent directly affects the volume of the harvest. Last agricultural year, African countries faced a sharp decline in harvests, which led to a record increase in prices. In 2024, the cost of cocoa will continue to depend on climatic conditions, but it is difficult to predict how nature will behave,” Lashmankin noted.

According to ICCO analysts, recent rainfall in the cocoa growing regions of Cote d'Ivoire could have a positive effect on future harvests. Nevertheless, the volume of goods shipped from the country still remains about a third lower than a year ago.

Moreover, according to the organization’s experts, the geopolitical factor has a certain influence on the cost of cocoa today. In particular, we are talking about the increasing frequency of attacks by the Yemeni Houthis on ships in the Red Sea and the Gulf of Aden, which has led to an increase in the cost of maritime cargo transportation.

“The recent rise in freight rates due to tensions in the Red Sea region is likely to impact international trade. Given already high cocoa prices, additional costs arising from high freight rates could prove daunting to cocoa consumers and impact demand,” the ICCO report said.

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It is noteworthy that the current situation on the world cocoa market has not yet affected the cost of sweets in Russia. According to the Federal Statistics Service, in 2023, retail prices for chocolates in the country increased by an average of 1.9-2.7%, while chocolate itself fell in price by about 1%. However, according to experts, ultimately, the continued rise in price of cocoa beans will still affect price tags in Russian stores.

“Pricing, for example, dark chocolate depends 70% on the cost of raw materials. Therefore, as the price of cocoa rises, the price of this type of confectionery product will also increase,” explained Vyacheslav Lashmankin.

Against this background, in 2024 the rise in the price of chocolate in Russia will be more noticeable than in 2023, but it is unlikely to become a rush, Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers, is sure. As the expert noted, retail chains still have large volumes of products in their warehouses, and manufacturers have not yet run out of stocks of raw materials purchased at old prices.

“I don’t think we should expect a sharp rise in prices for goods containing cocoa. This year, large Russian manufacturers will raise the cost of their products by no more than 10-15%. That is, we should not expect a price shock or a serious shortage of such goods on the Russian market,” the analyst suggested.