IF YOU’RE A chocoholic you may have noticed that your habit has lately become dearer. The price of cocoa began creeping up in the second half of 2022. Since then it has doubled, reaching an all-time high in January 2024 (see chart 1). That steep rise spells trouble for the chocolate business and sweet-toothed consumers alike. Hershey and Mondelez International, the owner of Cadbury, passed on these costs to shoppers last year. Hershey’s year-on-year profits fell by 11.5% during the fourth quarter. The company recently announced that it would cut 5% of its workforce. Barry Callebaut, the world’s biggest chocolate-maker, said that it would lay off 2,500 people, 18% of its workforce.
Climate patterns are partly to blame for rising costs. Cocoa is mostly produced by small farmers in West Africa. Ghana and Ivory Coast grow about 60% of the world’s crop (see chart 2). Last season the El Niño weather pattern led to unseasonably high temperatures and rainfall that ravaged crops. Total rainfall in Ivory Coast’s cocoa-growing areas in 2023 was the highest in 20 years, according to Gro Intelligence, a data firm.
Source link : https://www.economist.com/graphic-detail/2024/02/28/why-chocolate-is-becoming-much-more-expensive
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Publish date : 2024-02-28 08:00:00
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