Producers announce: Chocolate prices may remain high for a long time

As the sharp rise in global cocoa costs is reflected in chocolate prices, producers state that chocolate prices may remain high for a long time.

Don't leave your news choices to an algorithm - decide for yourself what you read. Add 12punto to your preferred sources!

Producers announce: Chocolate prices may remain high for a long time

With extreme weather conditions negatively affecting the cocoa harvest in West Africa for the third consecutive time, the price of this product has risen rapidly.

While the price of cocoa in global markets has tripled compared to last year, it exceeded 10 thousand dollars per ton for the first time two weeks ago.

The price increase in cocoa has put chocolate producers under unprecedented cost pressure, and this situation has been reflected in product prices.

In Belgium, world-famous for its chocolate, this product stands out both as an important area of economic activity and as a significant part of the country's culture. Belgian chocolate is noted for its high quality as well as its praline varieties, which contain various aromas and fillings.

9 THOUSAND PEOPLE EMPLOYED

While hundreds of boutique chocolate shops selling handmade and high-quality products operate in the country in addition to some large producers, approximately 9 thousand people are employed in the sector.

The annual turnover of the chocolate sector in Belgium exceeds 6 billion euros.

IVORY COAST AND GHANA PRODUCE 60 PERCENT OF THE WORLD'S COCOA

Mieke Callebaut, Advisor to the Royal Belgian Association of the Biscuit, Chocolate and Confectionery Industry (Choprabisco), evaluated the rise in cocoa prices and the state of the sector to an AA reporter.

Stating that she has been working in the chocolate sector for a long time and is experienced in Belgian chocolate, Callebaut said, "The main season for cocoa production went very badly. The harvest in Ivory Coast and Ghana, the two major countries in cocoa bean production, occurred at levels we have never seen before. Ivory Coast and Ghana account for approximately 60 percent of world cocoa production."

Stating that although there was no decline in other countries, the decline in production in these two countries disrupted the balance of the market, Callebaut explained that these countries experienced adverse weather conditions between October and March, and that excessive rainfall caused disease in the cocoa fruit, thus reducing production.

'THE COST OF AGRICULTURAL CHEMICALS HAS INCREASED'

Mieke Callebaut stated that global cocoa demand has not changed recently, but stocks have declined excessively and the market has also been affected by speculation, adding, "The maintenance of cocoa trees can no longer be done very well. Many farmers cannot really protect their trees as they should. Because since the energy crisis, the cost of machinery and agricultural chemicals, especially fertilizers, has increased excessively for these people as well. Therefore, they do not have the resources to take enough care of their trees."

Pointing out that it is not possible to increase cocoa production rapidly, Callebaut said that a newly planted cocoa tree can only yield fruit after 5-6 years.

Callebaut drew attention to the fact that cocoa has a long supply chain, emphasizing that producers make their purchases long-term, that there is a complex supply chain in cocoa, and that it is not possible to predict whether production will be good in the next season.

Providing information on the effect of cocoa on chocolate prices, Callebaut said, "In a 100-gram bar of 85 percent dark chocolate, the cocoa content is 85 percent and the sugar content is 15 percent. If you compare this with a box of Belgian pralines you buy from a good store, the situation is different. Belgian chocolates also contain ingredients such as cream, butter, nuts, and fruit in their fillings. The effect of the cocoa price on these products is very different from chocolates containing 85 percent cocoa."

COMPANIES FOLLOW DIFFERENT STRATEGIES TO ADAPT

Reminding that cocoa is also used in products such as wafers, ice cream, beverages, and biscuits, Mieke Callebaut stated that the increase in the price of cocoa does not only affect chocolate producers.

Evaluating what chocolate producers are doing against this situation, Callebaut said, "There are different strategies regarding this. Adapting to this situation and making changes is each company's own choice. Cocoa is one of the main ingredients for chocolate producers, and therefore its effect on chocolate prices is significant. Companies have different options. There is no single solution that applies to every company."

Underlining that different firms have developed different solutions, Callebaut said, "Are you at the premium end of the sector or do you have a lower price? There is chocolate that costs 100 euros per kilogram and chocolate that costs 20 euros. The options vary according to the prices. I think most companies are going through difficult times."

Noting that the economic size of the chocolate industry in Belgium reaches 6.1 billion euros annually, Mieke Callebaut added that the country exports 3.4 billion euros worth of chocolate per year.

News Source: AA