Your Sweet Tooth Is Getting Expensive
Cocoa prices have climbed past a record set nearly a half-century ago, costing chocolate makers, bakers and aficionados alike. The sharp climb in price for chocolate’s main ingredient started with bad weather in West Africa, where much of the world’s cocoa is grown. Speculators piling into one of the hottest trades outside of artificial intelligence have added fuel to the rally.
On Thursday, May cocoa futures added another $438 a metric ton to end at $7,405 in New York. That is nearly three times the price a year ago and 38% above the previous record set in July 1977 during another period of poor growing conditions in West Africa that shrank global supply. March futures, which expired Wednesday, closed out even higher, at $8,034 a metric ton.
On-the-spot prices in New York aren’t far behind. London futures have made a similar ascent, rising 75% this year. As they did in the late 1970s, surging cocoa prices have chocolatiers, confectioners and big food companies lifting prices, tweaking recipes and shrinking products.
Candy and chewing gum prices last month were 5.8% higher than a year ago, outpacing broader inflation, which was 3.2% in February, according to the Labor Department. Cocoa is climbing as prices for other agricultural commodities, including corn, soybeans and wheat, have declined from their pandemic highs. “We remain committed to our long-term strategy of pricing to cover raw material inflation and we expect several points of price realization this year," said Hershey Chief Executive Michele Buck.
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