This year was sour for sweets. Due to rising sugar prices and a shortage, Halloween candy prices rose 13% in 2023. Chocolate, another popular sweet, may now cost more in the US.
In a new analysis, CoBank, a rural American cooperative bank, predicted chocolate price increases "are likely" in 2024. The reason? Cocoa prices are roughly 65% higher than a year earlier, and producers are anticipated to raise prices to offset that.
CoBank, citing Eurobank International data, reported a 7.2% increase in US chocolate costs over the past two years and potential price hikes in 2024.
Increased chocolate prices are having varied effects on sales. Because chocolate is more expensive, sales rose in 2023. According to CoBank, chocolate sales have dropped 5% in the past year and 9.5% in the past two.
Hershey announced job cuts this week as it expects rising cocoa prices to hinder earnings growth in 2024..CoBank expects chocolate volume sales to drop further and dollar sales to fall due to rising pricing.
Since sugar costs have risen over the previous three years, cocoa concerns are especially difficult for manufacturers." CoBank senior food and beverage economist Billy Roberts stated.
"While sugar prices have fallen, cocoa futures prices remain around record levels and show little fluctuation. That could reduce chocolate volume and dollar sales."
Agriculture Dive reported that excessive rains and disease in West Africa, which grows 70% of the world's cocoa, caused cocoa prices to surge.
According to Bloomberg, Ghana was expected to generate its lowest cocoa output in 13 years in summer 2023. CoBank expects cocoa prices to rise until late 2024, when a new African crop is harvested.
Until then, grocery shoppers should expect to spend extra for their favorite chocolates.