Rising cocoa prices are souring the outlook for chocolate candy makers, said CoBank
Consumers are paying more for chocolate products as confection manufacturers raise prices in response to the soaring cost of cocoa.
They are nearly 65 per cent higher than a year ago, and New York futures prices are at a 46-year high.
While consumer demand has remained relatively strong, higher retail prices are poised to take a bigger toll on value sales and stifle category growth through much of 2024, said CoBank’s analysts.
Cocoa prices are likely to remain elevated until a new African crop comes to market late this year so chocolate candy prices will likely go up.
The cocoa issues come hard on the heels of increases in sugar prices over the past three years.
Billy Roberts, senior food and beverage economist for CoBank, said “while sugar prices have recently retreated, cocoa futures prices remain near record levels and show little sign of any significant movement.
“That could lead to a further erosion of chocolate volume sales and begin to impact dollar sales as well.”
