Get Ready for Higher Chocolate Prices

by William White | September 13, 2013 9:51 am

Chocolate Get Ready for Higher Chocolate Prices[1]Chocolate prices are expected to rise due to cocoa butter prices nearly doubling from $4,000 to $7,000[2] a metric ton.

Cocoa butter, which gives chocolate the melt-in-your mouth feel, is in high demand as more of the middle class can afford to buy chocolate. This, combined with the upcoming holiday period will likely keep chocolate in high demand. This means that some companies may have to pass the cost cocoa butter onto their customers. Nestle didn’t say if it would be raising prices on its chocolate, claiming that price hikes are always a last resort. Smaller chocolate makers haven’t been as lucky. One shop has increased its chocolate prices by 30% to 40% since January to make up for the high cost of cocoa butter. Barry Callebaut, which supplies chocolate to Nestle, Mondelez (MDLZ[3]) and Hershey (HSY[4]), claims that sometimes price changes have to happen, reports The New York Times.

Not helping the rising demand for chocolate is the low production of cocoa, which is facing a 98,000 ton[5] shortage this year.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/03/Chocolate.jpg
  2. $4,000 to $7,000: http://www.nytimes.com/reuters/2013/09/13/business/13reuters-cocoa-chocolates.html
  3. MDLZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=MDLZ
  4. HSY: http://studio-5.financialcontent.com/investplace/quote?Symbol=HSY
  5. 98,000 ton: http://www.bloomberg.com/news/2013-09-12/cocoa-shortage-seen-expanding-as-chocolate-sales-advance.html

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