Chocolate set for price rise as cocoa soars
Chocoholics might escape a toothache-style pain in their pockets for Easter – but when it comes to chocolate Santas, snowmen and other festive sweet treats, prices look set to add a bitter aftertaste.
Cocoa prices shot forward yesterday after the Ivory Coast said it was contemplating an export ban. The internationally recognised leader of the war-torn African nation, Alassane Ouattara, wants to use the ban as a move to choke off funding for the incumbent, Laurent Gbagbo, who has refused to concede defeat after elections last year.
It is not clear whether such a ban would be heeded by growers and whether it could be enforced if it weren't. But the political turbulence that continues to dog the country has caused a spike in prices of cocoa on international markets anyway.
Prices are up 12 per cent this year and yesterday surged to new highs. May cocoa futures on the London Futures Exchange jumped more than 7 per cent to a six-month peak of £2,269 per ton after the opening, and later eased back, but still closed ahead at £2,187.
Smarter chocolatiers typically make use of the futures market to ensure their supplies of cocoa – and of sugar – are locked in at a set price six months forward. Many have also sought to hold prices of what is a luxury product during the recession.
Chocolate companies were yesterday playing down talk of immediate price rises, calling the issues created by the Ivory Coast – the world's biggest exporter of cocoa, where a substantial proportion of the population rely on the commodity – "short term" and saying they expect shipments to start again once the turmoil in the country has been resolved.
But even if they can avoid substantial price rises over Easter, the price of sugar and other commodities that go to make up chocolate bars is rising relentlessly. Which means that if the political uncertainty continues, there may yet be price rises in store ahead of the festive period. Either that or makers could settle for another time-honoured trick – reducing the amount of chocolate in their product.