Chocolate lovers be warned - there's a looming shortage and
it's going to drive prices up.
Cocoa grinders are increasing their output, but a declining
supply of beans from West Africa will mean the first shortage
in three years.
And when supply cannot meet demand, there is only one thing
that can give: price.
Earlier this year, cocoa grinders cut back output and started
using reserves of butter to fill supply orders from chocolate
Cocoa beans make both powder and butter - the former is used
in products like biscuits and icecream whereas the latter
accounts for about 20 per cent of a chocolate bar.
But reserves are now running out just as chocolate buying is
accelerating and as the biggest cocoa growers' harvests are
crippled by drought.
Prices are estimated to rise as much as 7.5 per cent to more
than $3200 a tonne in the first half of next year, according
to the mean of 17 analyst estimates compiled by Bloomberg.
New Zealand chocolate maker Whittaker's could not rule out a
price increase for their bars here.
National sales manager Matt Whittaker said: "It won't affect
pricing in the short term, but as the [research] states, if
demand outstrips supply, the price of cocoa will go up and
ultimately chocolate prices will follow, assuming that
Cadbury said it did not comment on prices and commodities.
It is estimated cocoa demand will exceed production by
101,000 tonnes this season. However, one bank expected the
ratio to be even larger, with demand coming in at 122,000
tonnes more than production.
The shortage of cocoa beans means that global output will
drop 2.9 per cent to 3.85 million tonnes.
This will be led by smaller harvests in Ivory Coast, Ghana,
Indonesia and Nigeria - the four nations produce 74 per cent
of the world's beans - according to a prediction by
investment bankers Macquarie Group.
The cocoa shortages will be among topics discussed by the
International Cocoa Organisation at its first summit in
Abidjan, Ivory Coast, next week attended by 41 consuming and
- Amelia Wade of the New Zealand Herald