Crisis on the chocolate market?

Sándor Sánta, the president of the Association of Hungarian Confectionery Manufacturers, told Pénzcentrum that the price of cocoa started rising sharply last fall, reaching 10,000 dollars, while previously the price of cocoa was stable between 2-3,000 dollars. According to the president, the price of cocoa beans is currently four times higher than in recent decades, which is a serious problem for candy manufacturers.

Gábor Bukta, Concorde’s analysis business expert, explained that such a price increase is not entirely surprising, as we have already seen similar trends in other markets. There is usually a fundamental problem behind the price increase, such as a demand or supply shock. We encountered such shocks in the case of the negative oil price during Covid, as well as the rise in the price of wheat and gas in connection with the Russian-Ukrainian war.

Currently, most cocoa comes from Africa, but new players such as Ecuador and Indonesia have also entered the market and can help stabilize prices by balancing supply. The most important reason for the price increase is that all three major market players are prepared for a reduction in supply, which drove prices up. Cocoa production cannot keep up with demand, so traders cannot supply enough.