It exceeded 10 thousand dollars per ton! Chocolate prices may remain high for a long time – Last Minute Economic News

While cocoa costs, which have recently increased sharply in the world, are also reflected in chocolate prices, producers state that chocolate prices may remain high for a long time.

The price of this product has skyrocketed as extreme weather conditions negatively affected the cocoa harvest in West African countries for the third consecutive year. While the price of cocoa in global markets increased threefold compared to last year, it exceeded 10 thousand dollars per ton for the first time two weeks ago.

COST PRESSURE

While the price increase in cocoa put chocolate producers under unprecedented cost pressure, this situation was reflected in product prices.

In Belgium, which is world-famous for its chocolate, this product stands out as both an important area of ​​economic activity and an important part of the country’s culture. In addition to its high quality, Belgian chocolate also attracts attention with its praline type, which contains various flavors and fillings.

Approximately 9 thousand people are employed in the sector, while there are also boutique chocolate shops selling hundreds of handmade and quality products from some major manufacturers in the country.

The annual turnover of the chocolate industry in Belgium exceeds 6 billion Euros.

IVORY COAST AND GHANA PRODUCE 60 PERCENT OF COCOA

Mieke Callebaut, Consultant of the Royal Belgian Biscuit, Chocolate and Confectionery Association (Choprabisco), evaluated the increase in cocoa prices and the situation of the sector.

Stating that he has been working in the chocolate industry for a long time and is experienced in Belgian chocolate, Callebaut said, “The main season in cocoa production was very bad. The harvest in Ivory Coast and Ghana, the two largest countries in cocoa bean production, was at low levels we have not seen before. Ivory Coast and Ghana world “It accounts for approximately 60 percent of cocoa production,” he said.

Stating that although there was no decrease in other countries, the decline in production in these two countries disrupted the balance of the market, Callebaut explained that these countries experienced adverse weather conditions in the period between October and March, excessive rainfall caused disease in the cocoa fruit, and therefore production decreased.

Mieke Callebaut stated that the global cocoa demand has not changed in the recent period, but the stocks have decreased excessively and the market is also affected by speculation. “Cocoa trees cannot be maintained very well anymore. Many farmers cannot really protect their trees as they should. Because since the energy crisis, machinery, especially fertilizer, “And the cost of pesticides has increased excessively for these people. Therefore, they do not have the resources to adequately care for their trees.”

Pointing out that it is not possible to increase cocoa production rapidly, Callebaut said that a newly planted cocoa tree can only be productive after 5-6 years.

Callebaut pointed out that cocoa has a long supply chain and emphasized that producers make their purchases on a long-term basis, that cocoa has a complex supply chain and that it is not possible to predict whether the production will be good in the next season.

Giving information about the effect of cocoa on the price of chocolate, Callebaut said, “In 100 grams of 85 percent dark chocolate, the cocoa content is 85 percent and the sugar content is 15 percent. If you compare this with a box of Belgian chocolate with praline that you buy from a good store, the situation is different. The filling materials in Belgian chocolates are different.” “There are also ingredients such as cream, butter, nuts and fruits. The effect of cocoa price on these products is much different in chocolates containing 85 percent cocoa,” he said.

COMPANIES ARE FOLLOWING DIFFERENT STRATEGIES TO ADAPT

Mieke Callebaut reminded that cocoa is also used in products such as crisps, ice cream, drinks and biscuits, and stated that the increase in cocoa prices does not only affect chocolate producers.

Evaluating what chocolate manufacturers have done against this situation, Callebaut said, “There are different strategies on this issue. It is each company’s own choice to adapt to this situation and make changes. Cocoa is one of the main ingredients of chocolate manufacturers and therefore has a great impact on chocolate prices. Companies have different options. Each company “There is no single valid solution for this,” he said.

Callebaut underlined that different companies develop different solutions and said, “Are you at the elite (Premium) end of the industry or do you have a lower price? There is chocolate at 100 Euros per kilogram and chocolate at 20 Euros. Options vary depending on prices. I think most companies are having a hard time.” made his assessment.

Noting that the economic size of the chocolate industry in Belgium has reached 6.1 billion euros annually, Mieke Callebaut added that the country exports chocolate worth 3.4 billion euros annually.