Cocoa crisis: Chocoholics beware as prices surge, portions shrink
Indulging in chocolates is a universal delight, with their irresistible allure sparking a sweet frenzy among enthusiasts. But amid this craze, a bitter reality looms: the possibility of chocolates becoming pricier, smaller, or less cocoa-rich if the cocoa prices continue to surge. This dilemma has chocolate aficionados and confectionery makers, alike, on edge, as they grappled with the repercussion of record-high global cocoa prices earlier this week.
India imports a significant volume of the primary ingredient that goes into making chocolates. Global cocoa prices breached $10,000 per tonne on Tuesday, surging by over 100% in 2024 alone, due to a shortfall from key producers Ivory Coast and Ghana.
Regions in West Africa produce 70% of the world’s cocoa.
Experts said the sharp price escalation will hurt both mass market producers such as Nestle, Mondelez, Amul, ITC and Mars, which operate in India’s $2.2-billion chocolate market, as well as for specialty chocolate makers which source cocoa beans locally.
“There will be a significant correction in terms of the price because the raw material costs are high. We will naturally have to pass that on to consumers,” Ashar, co-founder and chief chocolate maker at Pascati, said.
The firm works with Fair Trade Alliance Kerala to source its Malabar Hills-origin cacao— the pods from which cocoa is derived. The brand sells chocolate bars (75 gm) priced at ₹280 or more. It also sells cocoa butDevansh ter and powder. A spokesperson for Nestle India said the maker of Kit Kat chocolates is “monitoring the situation”.
Spokespersons for Mars and Mondelez declined to comment.
In 2022, India imported cocoa beans worth $82.5 million, becoming the 17th largest importer in the world, according to the Observatory of Economic Complexity, portal for data visualization and distribution.
Baksin Robbins, which sells several flavours of chocolate ice creams, is also looking at ways to absorb the hight input costs avoidingimmediatepricehikes especially during peak summer season. “On commodity front, while we’re navigating fluctuation in cocoa prices, fortunately dairy ingredient prices have been reasonably stable. Therefore, we will hold price for now and absorb fluctuations at least for the next couple of months before we reassess the situation based on prevailing ground realities,” said Mohit Khattar, chief executive, Graviss Group, the parent firm of Baskin Robbins.
Last week, packaged foods major Parle Products warned of the impact of escalating cocoa prices. “Cocoa prices are really under stress; shot up disproportionately. We have candies and biscuits using cocoa-based products, which will have some bearing,” said Krishnarao Buddha, senior category head at Parle Products. The firm may take need-based pricing action if required. Other stakeholders said customers may face higher prices or reduced grammage or lower cocoa content in chocolates in the coming months.
Local cocoa prices have also escalated by 50% since November, mirroring the global surge, said Ashar. “These are uncertain times and will take another quarter to figure it out.”
The sharp price escalation will hurt both mass market producers as well as specialty chocolate makers