If you thought you heard me on the radio on the BBC Radio 5 business programme Wake Up to Money at 5.50am on Wednesday 10th December, then you were right. If you have the BBC Sounds app you can hear me talk to Sean Farrington about why chocolate prices have risen in the shops over the past 12 months.
According to the ONS, chocolate prices have risen by around 17%. By the way, ours have risen by less than that over this period. I explained why, and it is mostly driven by systemic issues in West Africa, where poor harvests over the past few years have resulted in less supply and rocketing cocoa prices since early 2024.
What has happened to the cocoa price
In fact, I spelled out the issue by highlighting the commodity cocoa price over the past three Decembers to make the point. In December 2022, the price of cocoa on the New York stock exchange was around $2,300 a tonne. In December 2023 it was starting to rise, at $4,000 a tonne. In December 2024 it had shot up to a peak of over $12,000 a tonne.
Prices have come down since then and are currently around $6,000 a tonne, which will hopefully become the new normal. The previous $2,300 a tonne was not sustainable for cocoa farmers, as they were not earning a living wage.
This is especially true in Ivory Coast and Ghana, which account for 60% of world cocoa production, where they don't even get paid the market price. They only get their government-run cocoa board 'farmgate' prices, which are set at around 50% below the market price. No wonder there are so many issues with children working on cocoa farms instead of going to school, slavery and lack of investment in new tree stock. The farmers can't afford to invest.
While I am on a rant, there is an additional long term systematic issue driven by these artificially low prices: young farmers don't want to grow cocoa. Why should they, if they are paid so little for their beans? Cocoa farmers are getting older, and young farmers would rather grow other crops with a better return, or leave farming altogether to head to the cities, or in the case of Ghana, try their luck gold mining.
Why our model is different
As you may be aware, we operate a very different trade model to the traditional one, where around 4 million subsistence cocoa farmers, mostly in West Africa, sell their beans to thousands of middlemen who then sell it on to the multinationals known as 'Big Chocolate' to process the beans in the West and add the value there. Transparency and traceability back to farms and farmers is just not there, and ensuring that the cocoa beans are slave-free is pretty impossible.
Further, sustainability programmes run by Big Chocolate are just tickling the surface. I would argue that the traditional cocoa supply chain model is pretty broken, and changes to wet and dry season patterns caused by climate change impacting recent harvests has just accelerated a problem that has been known about for many years.
By contrast, we work with chocolate partners based in their cocoa growing countries, and they are making couverture chocolate for us to work with in country of origin in Colombia, Ecuador and Madagascar. This direct trade model keeps more of the value chain in the cocoa growing country and literally raises the value of their trade, as they are exporting a value added product which employs higher skilled labour, creates a whole ecosystem around the production including machinery and packaging, and ultimately higher tax revenues for that country. They also have a vested interest in ensuring the long term viability of growing cocoa in their local countries, and all have sustainability programmes working with their partner cocoa farmers. They can also guarantee that the cocoa grown is slave-free.
They then ship the chocolate by sea direct to us in Dorset. In fact, we took delivery of another 10 tonnes of our signature award-winning 72% Ecuador dark chocolate made with Cacao Nacional cocoa beans grown on a single estate, Hacienda Zoilita, just this week. The container was packed at the Martinetti factory in Quevedo six weeks ago and arrived at our factory in Dorset on Tuesday. No middlemen taking cuts, no faff, a direct relationship between Ecuador and Dorset. How cool is that.
Click here for the Wake Up to Money episode on the BBC Sounds app.
