Achi news desk-
“Forget love… I’d rather fall in chocolate!”
It’s an anonymous saying but a trip to Master Chocolat Bernard Callebaut in Calgary has customers ready to take a dip. Maria Messier says she is a regular.
“We have loved Master Chocolat for many years. We have six grandchildren every year we come here for every special occasion.”
Bernard Callebaut’s passion has been chocolate for 41 years. He still makes Easter Bunnies for children of all ages.
“You bet. I get up early at 5 o’clock in the morning and I still love what I do. I really do,” said Callebaut.
But a huge jump in the price of cocoa beans will call for a price increase, Callebaut said – even if he can hold the line for now until supplies run out.
“We are fine, but ultimately in the long term, anyone in the chocolate industry will have to raise their prices.”
Callebaut said the price per metric ton for cocoa has doubled in the past three months and recently set an all-time high.
“In February 2023, so like just over a year ago, the price was $2,600 per tonne. This Tuesday it was just over $10,000 (USD).”
Why have prices skyrocketed?
Cocoa futures have “gone vertical” this year, especially in the past four months, said Graeme Crosbie, senior economist at agriculture lender Farm Credit Canada.
Futures are a way of measuring commodity prices based on contracts for future delivery, a common way of tracking commodity prices such as wheat, gold and oil.
A February report from agriculture-focused cooperative bank CoBank said cocoa prices were nearly 65 percent higher than a year ago, and New York futures prices were at a 46-year high.
Bad weather and disease in West Africa have hurt crop yields, Crosbie said, hurting supply for the produce that goes into Halloween, Valentine’s Day and Easter candy.
Most cocoa, especially the cocoa found in many popular chocolate products, comes from West Africa.
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Côte D’Ivoire saw a 30 percent drop in production over the past year due to climate change and disease, according to Sophia Carodenuto – a professor of geography at the University of Victoria whose research specializes in global food systems.
Unlike some crops, cocoa production is highly concentrated, meaning that huge portions of the world’s supply are grown in a handful of areas, Crosbie said. This makes the crop and its supply chain more vulnerable to disruption.
Callebaut agrees that the bean shortage has been caused by climate change, El Nino and farmers in Côte d’Ivoire and Ghana in West Africa – which supply 60 percent of the world’s cocoa market – leaving the industry.
“Because they don’t make enough money.
“I think keeping the price high is good because it will keep people in the industry – otherwise, there will be no more chocolate.”
Higher cocoa prices are a setback for manufacturers who have already been struggling with higher sugar prices over the past three years, senior food and beverage economist Billy Roberts said in a CoBank press release.
“That could lead to further erosion in chocolate volume sales and start to affect dollar sales as well,” he said.
The future of cocoa is not reflected in the farmer’s income
Advanced commodity futures also don’t necessarily dictate the prices farmers are paid in real time, Carodenuto noted.
In Ghana and Côte D’Ivoire, the countries that produce the most cocoa, the government creates a minimum price for farmers for the season, he said.
But the large international companies that buy and trade cocoa enter into forward contracts, which means that prices are agreed in advance.
Callebaut says farmers get about 30 to 50 percent of the price of the beans and the average farm yield is about a tonne. So even with an all-time high of $10,000 a ton – the annual wage is still only $3,000 to $5,000.
Building a cocoa farm requires a lot of manual labor and investment, so farmers need support, especially financially, Carodenuto said.
There is hope that higher prices in the future will lead to more income next year, but it is not a guarantee, he added – cocoa prices are cyclical, meaning a price drop is likely at some point.
Ethical choice versus affordability
Consumers looking to make ethical spending decisions face a difficult choice, Carodenuto says, especially given the price gap between premium chocolate and ethically sourced chocolate and popular mass-market confections.
Carodenuto said shoppers don’t need to stop buying chocolate, but they should educate themselves and seek supply chain transparency by looking for the origin of the cocoa in a product.
Shoppers who can afford to spend more can also look for businesses that specialize in sourcing ethical cocoa products, he said.
Callebaut said it has an ethical supplier and buys its beans from Central America, but supports the price increase to protect African farmers.
The Calgary chocolate maker said it accepts what comes.
Long-time customer Elaine Teodoro says price increases everywhere mean she has to be very selective when buying. But quality chocolate from Master Chocolat will remain on the menu.
“If, in order for it to survive, the prices need to go up – unfortunately that’s what it will have to be,” Teodoro said.
“The farmers need to be paid better.”
Maria Messier agrees.
“If it gets higher and more expensive, I’ll still come here.”
Cocoa prices don’t translate directly to retail prices, as there are many things other than cocoa that make up a chocolate bar, Crosbie said. But they are having an impact, and he expects retail prices to increase.
Callebaut said the industry giants will likely retain their market share with less expensive ingredients (a move known as skimpflation) and that shrinkage is already taking place.
But for the chocolatier, changing what goes into their product is unthinkable.
“No – no, that’s nothing. I have been making chocolate for 41 years. I’m not changing.”
— With files from Rosa Saba, The Canadian Press
