People around the world will consume hundreds of millions of Easter eggs and bunnies this holiday weekend, as part of an annual chocolate intake that could exceed 8 kg (18 lb) for each person in Britain, or 5 kg in the US and Europe . But a global shortage of cocoa – the seed from which chocolate is made – has led to warnings of a ‘chocolate meltdown’, which could see prices rise and bars shrink further.

This week, cocoa prices on commodity exchanges in London and New York rose to record highs, reaching above $10,000 per tonne for the first time, following the third consecutive poor harvest in West Africa. Ghana and Ivory Coast, which together produce more than half of the world’s cocoa crop, have been hit by extreme weather, fueled by the climate crisis and the El Niño weather phenomenon. This is exacerbated by disease and underinvestment in aging plantations.

The poor harvest has left chocolate makers struggling to secure supply, with many warning of more price rises and possible shrinkage in the size of bars and sweets. A spokesperson for Nestlé, which owns chocolate brands such as KitKat, Smarties and Quality Street, said prices for consumers may have to rise after cocoa prices tripled in a year.

Hedge funds have made big bets on the price of the commodity this year, with speculators betting more than $8 billion (£6.3 billion) that prices would continue to rise, according to the Financial Times. But none of the money will reach small producers in West Africa, as Ghana and Ivory Coast have already sold this year’s harvest through a cartel, leaving many farmers dissatisfied.

Along with coffee, tea and bananas, cocoa is one of the household staples threatened by global warming, with researchers rushing to find wild varieties that can better withstand heat and drought and withstand future conditions. However, unlike many of the world’s crops, much of the cocoa supply is produced by smallholder farmers, many of whom struggle to afford to replace aging trees and buy fertilizers.

A farmer tends his cocoa crops in Likpe Bala, Ghana. Photo: Muntaka Chasant/Shutterstock

“Cocoa prices have reached record levels on the international market. Paradoxically, this does not mean higher incomes for producers,” said Amourlaye Touré, senior advisor at the NGO Mighty Earth. “The record cocoa prices will not benefit the cocoa-producing countries themselves, because the raw material is converted into a final product after export.”

Martijn Bron, former head of cocoa trading at commodities giant Cargill, told the Guardian that the world will not run out of chocolate, but said prices could remain high for some time.

“There is a major shortage of fresh cocoa beans. Normally there is a global harvest of about 5 million tons. Now it is about 0.5 million tons less,” he said. Unlike other commodities such as soybeans or wheat, “you can’t just plant more cocoa trees and expect production to increase in the next few years – because they are trees,” he said.

“The market is now nervous about whether this is a one-off perfect storm or structural. If it is structural, that is a problem because it means that you cannot do anything about it on the supply side. It could take more than five years for supply to recover,” he said.

In the long run, the high prices could be good for farmers as they could lead to more investment in cocoa production, Bron said.

In Britain and elsewhere, chocolate prices are likely to rise further after major spikes in the run-up to Christmas last year, according to consumer group Which?.

A Nestlé spokesperson told The Guardian: “Cocoa prices have tripled in the past year. Although we have only passed on a fraction of the price increase to consumers in 2023, we may have to make responsible price adjustments in the future given the continued high cocoa prices.”

A spokesperson for Lindt & Sprüngli, maker of the popular Easter bunny, said the increased cost of cocoa will require further price increases in 2024 and 2025, assuming costs do not rise further. They said it wouldn’t change the recipes.

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