Low Cocoa Harvests Cause Chocolate Price to Soar

If you’ve shopped for chocolate lately, you may have noticed that your favorite items are either smaller or more expensive, and sometimes they’re both. The key ingredient in chocolate is cocoa, and the price of cocoa is the highest it’s ever been. In the last four months, it’s nearly doubled. Ali Rogin tells us that this worldwide shortage has been years in the making.

It’s a sweet treat and can be an affordable indulgence. But the rising cost of cocoa could soon leave a bitter taste in the mouths of chocoholics.

The people who will be affected would be the chocolate lovers who really want to buy good quality chocolate at extremely low prices.

Chocolate making starts with cocoa beans, an extremely vulnerable crop, says supply chain strategist Matt Spooner.

The El Niño last year caused particularly hot, wet weather in Western Africa, which has impacted the quality of the cocoa harvest. In addition, there’s a disease which is sweeping through the West African cocoa crops called swollen shoot disease, and this is decimating the cocoa harvest.

West Africa accounts for over 70% of the world’s cocoa supply, but low prices and smaller harvests have tightened farmers’ margins.

We are investing more, but we are still producing less.

Ghana is one of the hardest hit places and Ghanaians like Issifu Issaka are struggling to keep family farms afloat.

You are not able to produce their required amount of cocoa beans you’re expected, so you produce less. You take this small cocoa bean to the market, you don’t get more money.

Most of the farms in West Africa are under 10 acres. The farmers who cultivate them earn less than $2 per day.

This crisis has come about because of a long-term underinvestment or underpayment of the farmers.

Another factor, rising production costs. Fertilizers and pesticides are more expensive due to inflation and the war in Ukraine. And they’re more necessary as farms age and erratic weather increases the risk of disease. More sustainable practices like planting cocoa alongside other trees would make farms more resilient but cost more up front.

When we talk of sustainability, we shouldn’t talk of sustainability in terms of the cocoa tree or the cocoa bean, but sustainability in terms of the living condition of the farmer.

To make matters worse, rampant illegal gold mining threatens the cocoa farms.

Today we don’t get labor because instead of going to work for a cocoa farmer, you’d rather go and work for an illegal miner who will pay him a huge amount of money as compared to the cocoa sector.

The miners also flood farmland to help extract the gold that lies below the cocoa trees. This is cocoa farmer Janet Gyamfi, harvesting one of her 6,000 cocoa trees just last year. This is her land today, ravaged by miners.

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My toil, my livelihood was destroyed. I have no source of income anywhere.

Once the gold is extracted, the pits of mercury and heavy metal laid in water pollute the waterways that supply farms miles away.

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In the process of their mining, they destroy some of my cocoa trees. And when I complain, it always turns sour. Some of them even threaten me. They’ve even come to my house at night to make death threats. But thank God, we’re still alive.

Cocoa farming isn’t just a dangerous business, it’s also not very profitable.

People are not interested to becoming cocoa farmers because they don’t see the cocoa farming as a good business venture.

That’s in part because the high price cocoa is commanding doesn’t reach the farmers growing it. In many countries like Ghana, the government sets the so-called Farm Gate Price. It’s meant to insulate farmers from low prices, but it’s often out of step with the market. In early April, the Ghana Cocoa Board said it would raise the price over 50%. That’s still nowhere near the price experts say farmers need to stay afloat.

Somebody sitting at New York Exchange, sitting at the London Exchange, deciding the price for you, the farmer. Whom have not even held cutlass in his hand and weeding on the farm before.

Further up the supply chain, big companies like Hershey and Cadbury are increasing prices to make up for high ingredient costs, even as they report shrinking sales. They’re also changing recipes.

One strategy is to reformulate the chocolates and increase more non-chocolate ingredients. So maybe more wafers into their chocolates and reducing the cocoa content so that they could still provide the same size chocolate to a consumer, but actually it contains more non-chocolate ingredients.

The Swiss brand Toblerone had to remove its classic depiction of the Matterhorn Mountain Peak when it moved some production out of Switzerland to reduce costs. Companies are also diversifying beyond pure chocolate, creating new flavors and marketing other candy. California-based Voyage Foods is taking a different approach altogether, making chocolate without cocoa.

Our core mission is to future-proof some of our favorite foods.

Kelsey Tenney is Voyage’s Vice President of Research and Development.

It’s not our aim to replace cocoa as a commodity globally. We are looking to essentially buffer out the supply chain and create a product that can be utilized, for example, in your favorite chocolate chip cookie that you buy in the grocery store.

The key ingredient in Voyage’s chips and easy-melt wafers, grape seeds.

Not everyone has done this, but if you’ve tasted a raw cacao seed, it tastes nothing like a chocolate bar. And so we study the process and the starting material and aim to recreate a final product through different starting material.

There have been attempts to replicate chocolate through the decades, but for now there’s no substitute that can meet global demand. And that’s why Issifu says the world still needs cocoa farmers.

If I leave the cocoa sector today, if other people I know also leave the cocoa sector, it means there wouldn’t be no cocoa. So how are the consumers going to live without cocoa?

That’s a future most chocolate lovers don’t want to contemplate. For PBS News Weekend, I’m Ali Rogin.