Chocolate prices set to rise further as cost of cocoa increases

The average price of a block rose from $3.27 in mid-2006 to $5.56 in August. Photo / 123rf

By Susan Edmunds of RNZ

Chocolate prices could be set to rise further as the cost of cocoa keeps pressure on.

Stats NZ said this week that chocolate blocks were part of the reason that grocery food prices were up 2.4% in the year.

Consumer prices manager James Mitchell said the average price of a 250g block of chocolate was up 20% over the year.

The average price of a block had risen from $3.27 in mid-2006 to $5.56 in August.

Foodstuffs said customers were still buying chocolate but at a lower volume.

“Our retail pricing for chocolate is driven by the market and wholesale pricing from our suppliers. In the last year, global commodity costs for cocoa were up by more than 170%, driven by global supply shortages, which impacts the cost that suppliers are charging us and the price of chocolate we’re seeing on our store shelves. "

Chocolate manufacturer Whittaker’s said in a statement that there had been “significant ongoing cost escalation of cocoa” driven by supply constraints.

It said there would be an impact on the future price of all chocolate.

Whittaker's has been forced to raise prices for the third time in two years.

“For our part, we factor the cost volatility of global commodities like cocoa into our long-term pricing to keep prices as stable as possible – but ultimately for any business, there obviously comes a point when it is no longer possible to keep absorbing cost escalation.”

The company said it would let customers know in advance about planned price changes “and hope they would agree that would be preferable to any changes to our commitments around quality, ethical sourcing, or where we make our chocolate”.

It announced an increase in prices in May, the third in two years.

Brad Olsen, chief executive at Infometrics, said there was “definitely” the potential for retail prices to increase more.

Prices were up 33% over three years but international cocoa prices were up 150% on average and sugar was up 38%, he said.

“It might be more difficult for chocolate to increase in price, being a “nice to have” rather than a necessity as households are more careful with their money but chocolate for households is the necessary luxury so willingness to buy chocolate might remain pretty high despite higher prices.”

He said 75% of cocoa came from western Africa, where there had been a run of dry weather.

“There is still a lot of demand but supply has dropped back so prices have increased.”

He said cocoa prices in August were double what they were in August 2023 and nearly triple the rate of August 2022.

Prices were still not high enough for producers and there was talk of beans being smuggled out to get more money for them, he added.

“Pricing pressures are likely to be sustained. Cocoa prices were fairly stable until 2023 but the last couple of seasons have had lower production which has sent prices higher.”

- RNZ

Sign up to The Daily H, a free newsletter curated by our editors and delivered straight to your inbox every weekday.