Summary
Ex-factory chocolate prices have increased rapidly in the European Union during the past year. Prices have increased by about nearly 6% from August 2021 to August 2022, according to EUROSTAT. By the same token, cocoa futures prices have declined by 13% and 9% respectively on the London (ICE Futures Europe) and New York (ICE Futures US) markets. The authors ask the fair question – “Should cocoa prices not drive production costs in the cocoa and chocolate industry?”
Should cocoa prices not drive production costs in the cocoa and chocolate industry?
ICCO September 2022 Monthly Market Report
The authors examine the distribution of costs, margins and taxes for an average bar of dark and milk chocolate bar sold in France, although they use margins calculated in 2018, the variance today is likely to be minimal if you exclude any abnormality over costs associated with logistics during the pandemic.
The report concludes that cocoa prices are a small fraction of the overall cost inputs, and therefore sways in raw material costs don’t influence much change in the end price the consumer pays for a bar of chocolate.
As the month progressed, the global inflationary pressures were anticipated to negatively affect demand as consumers continued to be faced with reduced purchasing power. Regarding supply, there were prospects for an abundant start of the 2022/23 crop in Côte d’Ivoire. The producer price of cocoa beans for the main crop of the 2022/23 season in Côte d’Ivoire was announced at 900 XOF/kg, which is equivalent to US$1,364 per tonne. In Ghana, cocoa farmers are expected to receive 12,800 Ghana cedis per tonne.
Report Highlights
- Ex-factory chocolate prices have increased rapidly in the European Union during the past year.
- Prices have increased by about nearly 6% from August 2021 to August 2022, according to EUROSTAT.
- By the same token, cocoa futures prices have declined by 13% and 9%, respectively on the London (ICE Futures Europe) and New York (ICE Futures US) markets.
- Cocoa prices do not bear heavily on the price of a bar of chocolate
- As the month progressed, the global inflationary pressures were anticipated to negatively affect demand as consumers continued to be faced with reduced purchasing power.
- Regarding supply, there were prospects for an abundant start of the 2022/23 crop in Côte d’Ivoire.
- The producer price of cocoa beans for the main crop of the 2022/23 season in Côte d’Ivoire was announced at 900 XOF/kg, which is equivalent to US$1,364 per tonne.
- In Ghana, cocoa farmers are expected to receive 12,800 Ghana cedis per tonne.
Cocoa prices continued their decline in September. In Europe, the average total stocks of cocoa beans reached 187,832 tonnes. In the United States, the average total stocks of cocoa indicated a 4% increase. Download the full report here
