A cocoa shortage is putting a damper on Valentine's Day spirits as prices reach a high not seen in more than four decades.
Cocoa prices are nearly 65% higher than they were one year ago, according to CoBank. Prices have surged to a 46-year high, with cocoa futures in New York jumping to $4,500 per metric ton -- a 31% increase in just the past six months. It's the highest price since 1979.
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The price spike is direct response to dwindling cocoa inventory in West Africa, which accounts for more than 70% of the world's supply. While several factors impact production, none have been more damaging than weather and crop disease.
The West African region experienced extreme rainfall for several months, leading to crop loss. Although cocoa requires consistent rainfall to thrive, the volume of rain in the region literally drenched crops to the point they were unable to produce the flowers that turn into cocoa pods, Fox Weather reported. The rain also accelerated the spread of black pod disease, which causes cocoa pods to rot.
Another factor: Farmers in the region have struggled to access affordable fertilizers and pesticides to protect crops, especially since the conflict in Ukraine has curtailed Russia's export of potash and other fertilizers, The Conversation reported.
All of that leads to higher retail prices for consumers. Manufacturers of chocolate products have been raising consumer pricing for months due to the sourcing challenges.
Chocolate prices have already surged 17% in the U.S. over the past two years and now, consumers are paying 9.2% more than a year ago for confections, according to CoBank.
Prices are expected to stay at record-levels for quite some time. CoBank predicts that cocoa prices will remain elevated until a new crop comes to market in late 2024.
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