Many customers have noticed an increase in the prices of coffee and cocoa in stores over the past year. Experts of Finam warn that the current price increase is not the limit and it will continue in the near future. Moreover, chocolate products will also experience "shrinkflation".
Cocoa and coffee futures are growing
As of March 5, cocoa futures in New York increased by 2.7% to $8,600 per ton from a four-month low, while Arabica coffee futures up by 2.6% to $4.0880 per pound. According to experts, cocoa futures in New York have recovered due to purchases in the industry, despite concerns that high prices last year could curb demand.
Hershey points to a gap between cocoa futures and the commodity market associated with reduced liquidity and increased volatility. In coffee, the investment company Sucden Financial notes increased customer pressure, which has led to higher prices for Arabica. A slight increase in robusta coffee and sugar futures complements the difficult scenario.
This price increase reflects broader trends affecting global trade and the economy. Companies such as chocolate manufacturer Lindt & Spruengli are showing steady sales against the backdrop of high prices, which indicates the resilience and adaptability of the market. In 2024, the company's sales increased by 7.8%.
Crop problems in exporting countries
Experts consider supply-side problems related to harvests in exporting countries to be the main reason for the increase in prices of coffee and cocoa.
Brazil, the world's largest coffee producer, is facing one of the worst droughts in history, which has severely affected yields. According to reports, 90% of the Brazilian harvest in 2024 has already been sold, with only 10% remaining until the next one.
Vietnam, the world's second-largest coffee producer, also faced a decline in production. The U.S. Department of Agriculture predicts that robusta coffee production in Vietnam in the 2024/25 marketing year will decrease to 27.9 million bags from 28 million bags in the previous season.
Coffee production in India has also suffered, with yields falling by 20-30% due to unseasonal weather conditions.
Most of the world's cocoa beans, from which chocolate is made, are grown in West Africa. In 2024, this region was severely affected by drought, which led to low yields.
The further dynamics of prices for coffee beans and cocoa beans will depend on the recovery of crop volumes in the main exporting countries. So far, no one can predict exactly when it will be.
