Before the golden Easter bunnies reach our supermarkets, they are made in Aachen from Swiss cocoa mass. The Swiss, on the other hand, source their cocoa beans from all over the world; The most productive growing areas are in West Africa, South America and Southeast Asia. But retailers will face much higher prices in the future and consumers will face less chocolate.

Trend at Easter: cocoa prices skyrocket

Because during Easter, historical highs were recorded on the London and New York cocoa markets: a ton now costs more than 10,000 dollars, about 9,200 euros. The increase in demand during Easter is not responsible, because it represents an important part of the sales of chocolate manufacturers and is expected. Rather, several crop failures are responsible for this increase.

Cocoa is not the only plant affected: coffee beans are considered “particularly at risk”, which is already noticeable in the crops of countries such as Indonesia. Tea gardens are also threatened by increasing extreme weather events. And in Spain, olive oil, which has become more expensive due to the drought, has become so popular that it is stolen from supermarkets.

Climate change is to blame for poor harvests

Climate change is to blame, but also El Niño. For the third time in a row there has been a failed harvest in West Africa. Heat waves, such as the one that hit Ghana in February, affected trees weakened by heavy rains. In Côte d'Ivoire it did not rain at all during the winter. The result: damaged and destroyed cocoa trees, whose harvest fails again. Cocoa farmers may sell fewer beans or have to raise their prices so much that demand falls.

A recently published study has shown that this heat wave was likely driven by climate change and that such an event would have been much less likely without human-caused climate change.

The succession of rains and droughts also favored the spread of pathogens and mold, which in turn destroyed the plants. Many cocoa producers in Ghana and Côte d'Ivoire are small, self-employed farmers who often make much less profit from the harvest than traders. They often cannot afford pesticides and fungicides.

Furthermore, in the last two years the cocoa plantations have had lower yields and therefore there are hardly any supplies for traders to draw on. There is currently a shortage of around 250,000 tonnes of beans worldwide.

Record cocoa price in April

The result: horrendous price increases on the London and New York cocoa exchanges.

Note: The data in the graph is not adjusted for inflation: prices in 1977 would be equivalent to about $27,000 per ton today.

The graph shows an unprecedented rise in cocoa prices: while the previous record in 1977 was $5,291 per ton, there was such a sharp rise during Easter that traders had to pay $10,059 for a ton of cocoa.

According to experts, another poor harvest is likely this year, which in turn could lead to further price increases. And the EU wants to ban the import of goods that promote deforestation starting later this year. However, in Ghana and the Ivory Coast, more and more fields are being cleared to make way for (sometimes illegal) gold mines. According to the new directive, products from these countries will no longer be able to be sold in the EU.

West Africa's own farmers have little to do with this unusual euphoria. There is a fixed price per ton of cocoa beans, usually between $1,600 and $1,800 per ton. This actually protects farmers from suffering losses when prices fall. But right now, when climate change and El Niño threaten to literally ruin their harvest and prices are skyrocketing, the fixed price is becoming a boomerang.

There are no such rules in Brazil, Ecuador or Indonesia, which is why farmers benefit from horrendous prices. This is exactly where much of the revenue could come from in the future.

Consumers are threatened by “counterinflation”

Manufacturers such as Lindt and Nestlé told the British newspaper Guardian that they are watching the market with concern, but do not want to change their recipes. This prevents more efficient production, for example by using less cocoa or replacing cocoa fat with vegetable oil. So your only option is to increase the price or reduce the size of your products: the so-called “shrinkflation”, in which a smaller number of products are offered at the same price.

This is what happened with Mars, whose “Galaxy” milk chocolate is now sold for 100 grams instead of 110, at the same price. The same applies to the popular chocolate eggs, which are especially sold at Easter, or the popular Snickers bar.

To do?

A solution to the problem would be to expand the cocoa market and strengthen it in countries like Ecuador or Indonesia; then there will no longer be a shortage like the one currently occurring.

But that does not protect farmers in these regions from extreme weather and climate events. Countries like Brazil are also affected by El Niño and La Niña, which disrupt agriculture with their heavy rains and periods of drought.

Another option would be to pay affected farmers in Ghana or the Ivory Coast a better price for their crops so they can invest in new, climate-resilient crops and better pesticides. This is precisely why there are, for example, various climate funds aimed at compensating those affected by the damage caused by climate change.

But even if the global community agrees on a strategy, one factor remains: the money that funds this compensation. And if this gets through to retailers and manufacturers, it will likely trickle down to consumers as well.