Cocoa price hits US$10,000 a tonne, prompting chaos for industry and consumers

In the current era of high inflation, consumers have gotten used to sharp increases in the price of everything from cars to shelter. But the latest bittersweet twist in the story is unfolding now as the cost of chocolate is skyrocketing — and everyone from Big Chocolate to the Easter Bunny are feeling the bite.

This week, cocoa futures in New York eclipsed the US$10,000 per metric tonne mark, a record-high. The last time cocoa futures were above even $5,000 was 46 years ago. The skyrocketing price of cocoa this year has even outpaced that of stock market darling Nvidia.

It’s happening because of a complex interplay of factors, mostly supply constraints in West Africa. But a quadrupling of prices in under a year has fundamentally shifted the dynamics of the market, as buyers and sellers move from orderly trading to a more frenzied scramble to secure supply.

“This is not a speculative bubble that can burst from a shift in market sentiment,” said Judith Ganes, president of JGanes Consulting, a commodity advisory services firm. “Buyers are scrambling to secure supplies… be it beans, cake, butter, or powder to assure that they have sufficient supply on hand to meet needs.”