Shoppers should budget for higher confectionery prices ahead of the festive season as cocoa and sugar prices stay sky-high, experts have warned.
Cocoa and sugar prices are likely to remain at record highs throughout the rest of the year as production in key regions such as west Africa and Brazil takes a tumble due to weather conditions and disease.
“As Halloween and Christmas approach, cocoa prices are a key focus,” said Kumar Amit, senior specialist at WNS Procurement. “Although prices fell to £5,302 per metric tonne in September 2024, they are still up by 44.9% compared to the start of the year.”
Amit said the one-year delay of the EU’s anti-deforestation regulation – which was meant to roll out this December – “may reduce panic buying”, but this was likely not enough to offset the recent rise in farmgate prices seen in both Ivory Coast and Ghana, which produce most of the world’s cocoa.
Commodity specialist at the Smart Cube, Nidhi Jain, added: “With Halloween fast approaching, we foresee that cocoa costs will remain elevated, with London cocoa prices especially having already increased 60% since the beginning of the year.
“This is not expected to decline anytime soon, with supplies in Ivory Coast and Ghana experiencing polarising weather changes which have exacerbated the spread of disease.”
Read more:
Sugar was also “likely to follow a similar trend”, she said, due to unfavourable weather and recent wildfires ravaging key sugar-producing regions in Brazil, which is putting a strain on global supply chains.
Continued dryness in the centre-south regions, which account for 90% of the country’s total sugarcane crop, and likelihood of development of La Niña weather conditions during late 2024, may have a further negative impact on the country’s sugarcane yields, Jain said.
India’s continued sugar exports ban in the marketing year 2024-25, due to lower production, is also set to push up prices. The country is the world’s second-largest sugar producer.
Henrique Akamine, head of sugar and ethanol at Expana, said: “Since August 2024, when sugar futures were trading at this year’s lowest, around US$ 17.00 C/LB, global prices have rallied by 27%.
”The major concern is that poor weather conditions are likely to continue for the remainder of the year, adding to the risk of even lower Brazil supply next year.
“With the largest supply shrinking in size and the second largest producer still absent, prices are expected to remain high, also affecting local markets in the EU and the US – in other words, sugar will remain expensive in the ingredient’s basket.”
Confectionery goods have already seen some of the highest price increases of any groceries this year. The Grocer’s own Key Value Items (KVI) tracker shows that the average price of a Cadbury Dairy Milk Chocolate bar (95g-110g) is 20% higher than it was last year, and 2% higher than last month.
Own-label dark and milk chocolate are also up 23% on the year, while own-label chocolate ice-cream is up 10% compared with last year and 4% versus last month.
Those wanting to pick up sugar to bake their own goods will find a bag of 1kg own-label sugar costs 5% more this week than it did in the same period last year, the KVI shows (see table below).
Furthermore, the record-high commodity price increases seen in recent months have not yet been fully passed on to consumers as “industry has used up its lower-priced forward cover”, noted Expana’s soft commodities analyst Steve Wateridge.
“So we can expect to see material price increases for chocolate confectionery products this Christmas.
“We are also likely to see manufacturers try to use less cocoa in their products by, for instance, promoting filled bars rather than solid bars, applying thinner layers of chocolate on chocolate coated products and using more cocoa butter substitutes in place of the real thing,” Wateridge added.
“The bottom line is that anyone who wants to gift or consume chocolate this festive season will have to pay significantly more for the privilege than they did last Christmas.”
No comments yet