Unprecedented Challenges for Cocoa Industry: Facing Rising Prices and Adverse Weather Conditions

Fazer seeks alternatives as cocoa prices soar

In recent years, the cocoa industry has faced significant challenges due to adverse weather conditions in Africa. The surge in cocoa prices, caused by heavy rains followed by drought, has impacted global markets and led chocolate manufacturers to seek alternative raw materials and raise prices.

According to Bloomberg, the price of cocoa reached an unprecedented $10,000 per ton in May 2021. Cocoa futures prices have increased by 60% in New York this month and have more than doubled this year. The primary reason for this price increase is the adverse weather conditions affecting Ghana and Ivory Coast, the world’s largest cocoa-producing countries.

The El Niño weather phenomenon brought heavy rains to the region, exposing cocoa trees to diseases and causing beans to rot on the trees. This was followed by exceptionally dry conditions that impacted cocoa production. Climate change has only exacerbated these challenges, with El Niño becoming stronger each year.

To respond to rising cocoa prices, chocolate manufacturers have implemented various strategies such as increasing prices or reducing product size without changing the price. Fazer, a Finnish company, raised prices due to the hike in cocoa prices and is exploring alternative raw materials to replace cocoa.

Fazer is currently researching potential substitutes for cocoa and experimenting with cereal-based chocolate bars while aiming to maintain product quality. They are also looking at cost-saving measures as they prepare for various future scenarios. Despite efforts to mitigate the impact of rising cocoa prices, uncertainty remains within the industry as operators monitor the autumn harvest for future supply availability.

High cocoa prices may eventually be passed on to consumers, affecting their purchasing decisions. As such, there is a need for innovative solutions that can adapt to the changing landscape of the industry.

In conclusion, adverse weather conditions resulting from climate change have significantly impacted global markets by leading to a surge in cocoa prices. Chocolate manufacturers are responding with various strategies such as raising prices or reducing product size without changing price while exploring alternative raw materials like Fazer who aims to maintain quality while keeping costs down for future scenarios. However, uncertainty remains within the industry as operators monitor future supply availability while trying innovative solutions that can adapt to changing landscapes of the industry

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