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Chocolate – how high can it go?

Chocolate prices have surged in the last 12 to 18 months, leaving consumers wondering about the reasons behind this significant increase. Several factors have contributed to this trend, ranging from supply chain disruptions to increased demand and changing consumer preferences. Understanding these factors can provide insight into why chocolate has become more expensive and what the future may hold for this beloved treat.

One of the main factors affecting chocolate pricing is cocoa production and how the weather conditions has significantly reduced availability this year. Cocoa trees require specific climatic conditions to thrive, including consistent rainfall and moderate temperatures. However, climate change has led to more frequent and severe weather events, such as droughts and heavy rains, which can damage cocoa trees and reduce yields.

For example, in the 2020/2021 cocoa season, West African cocoa production, which accounts for over 70% of global cocoa output, was significantly impacted by dry weather conditions. Ghana and Ivory Coast, the two largest cocoa-producing countries in the region, experienced below-average rainfall, leading to a decrease in cocoa yields.

According to the London futures market, cocoa prices have risen sharply in response to these production challenges. The futures market provides a benchmark for cocoa prices and is used by traders and companies to hedge against price fluctuations. The increase in cocoa prices reflects the reduced supply caused by lower production levels, as well as the uncertainty surrounding future harvests.

In addition to weather-related challenges, cocoa production is also affected by pests and diseases. Cocoa trees are susceptible to a range of pests and diseases, including black pod disease and cocoa swollen shoot virus, which can devastate cocoa crops if not properly controlled. These factors, combined with the impacts of climate change, have put additional pressure on cocoa production and contributed to lower yields in recent years.

Looking ahead, it is essential for the cocoa industry to address these challenges to ensure the long-term sustainability of cocoa production. This includes investing in research and development to develop more resilient cocoa varieties, implementing sustainable farming practices to mitigate the impacts of climate change, and supporting farmers with training and resources to improve yields and livelihoods.

In conclusion, cocoa production has faced numerous challenges in recent years, including adverse weather conditions, pests, and diseases, which have led to lower yields and higher prices.

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