The causes are capricious climate change, plant diseases, poor harvests and strong demand
Vienna (OTS) – „The world market price for cocoa has exploded. It has more than tripled within a year and, after a slight easing, is currently still twice as high as at the beginning of the year
“, explained Mag. Katharina Koßdorff, Managing Director of the Food Industry Association. According to the International Cocoa Organization (ICCO), the stock market price for a ton of cocoa has climbed from around 2,000 euros to over 10,000 euros in recent months and is currently around 7,000 euros. Koßdorff: “Cocoa prices above the 10,000 euro mark per ton were the highest values in the history of price records. The cost of cocoa has risen so sharply because the harvests in important producing countries such as Ivory Coast and West Africa were poor.
Heat, periods of drought and an old, low-yielding cocoa tree population caused a shortage of cocoa on the market. Since the global demand for cocoa products remains high, prices have recently risen massively.” But not only the stock market prices for cocoa shot up, but also the surcharges charged for the food industry, for example for transport, storage and insurance freight or for the services of intermediaries. These surcharges have increased tenfold in the last 12 months and rose from around 250 euros to up to 2,500 euros per ton of cocoa.
„All manufacturers of cocoa products such as chocolate or cocoa drinks as well as cocoa-containing foods such as long-life baked goods (e.g. waffles and chocolate-covered biscuits) are currently under pressure when it comes to the procurement and financing of cocoa. In addition, the costs for transport, energy, packaging and personnel have a negative impact
“, so Koßdorff.
Further supply bottlenecks feared
As was recently the case with oranges, a disease called cacao swollen shoot virus (CSSV) is also raging among cacoa trees. Longer periods of rain promote the spread of CSSV, which is spread by aphids and causes the death of cocoa trees. The only effective control is to cut down infected trees and plant new ones. This leads to crop failures and delayed production until the trees bear cocoa beans again. In Ghana, 17 percent of all cultivated areas are said to be affected, and the CSSV is also spreading to Ivory Coast. Around 60 percent of global cocoa production comes from these two countries, which is around 2.4 million tons according to ICCO. According to ICCO, around 4.5 million tons are produced worldwide.
EU deforestation regulation increases costs
The EU’s new deforestation regulation will come into force at the end of 2024. This is intended to prevent forests from being cleared to grow cocoa, but also soy, coffee, palm oil, wood products and rubber. In the future, manufacturers will have to prove that the products in their growing areas or along the supply chain were produced “deforestation-free”. To do this, they must provide evidence along the supply chains. This means high administrative effort and costs for the procurement of raw materials such as cocoa and for the manufacturing process.
Koßdorff concludes: “All food manufacturers are under enormous pressure when it comes to cocoa prices. The cost rally along the cocoa supply chain is affecting the food industry for its cocoa products and foods containing cocoa. An easing of the situation does not currently appear to be in sight. We expect the next cocoa harvest in October 2024.
“
Importance of the food industry in Austria
The food industry is one of the largest sectors in Austria. In the interests of consumers, it ensures the supply of safe, high-quality and affordable food every day. The approximately 200 companies with their 27,400 direct employees generate an annual production volume of around 12 billion euros. Around 10 billion euros of this are exported to over 180 countries. The trade association supports its members through information, advice and international networking.
Questions & Contact:
Mag. Katharina Koßdorff
Managing Director of the Food Industry Association
Tel.: +43 1 712 21 21 – 14
k.kossdorff@dielebensmittel.at
Food Business Consult
THE Oscar Wawschinek MASS MBA
Press spokesman for the food industry trade association
+43/664-5456350
office@foodbusiness.at