How bakery producers can avoid the sting of runaway cocoa prices

Global cocoa prices have been experiencing a significant surge, reaching historical highs in March of nearly $10,000 per metric ton. And although they have since decreased slightly, they remain elevated compared to previous years​.

Several reasons are driving this increase, including adverse weather conditions that are dramatically impacting yield, particularly in West Africa, where most of the world’s cocoa is produced. El Niño brought unseasonal heavy rains followed by dry heat, contributing to a projected 11% drop in global cocoa supply for the 2023-2024 season.

In Ghana and Côte d’Ivoire – two other main cocoa-producing hubs – the outbreak of diseases like Witches’ Broom Disease, Frosty Pod Rot and Vascular-Streak Dieback that affect cocoa plants have further strained supply. Playing into the mix is the region’s chronic underinvestment in cocoa farms and the aging of its cocoa trees, both long standing issues that have been lowering productivity over time.

And according to JP Morgan, market speculation has also played a role, with high levels of projected trading contributing to price volatility in the cocoa futures markets​.

To avoid the sting, flavor specialist I.T.S is urging producers to consider natural chocolate flavors in place of the real thing.

“One of the most straightforward and stable solutions to reducing the amount of cocoa powder in a recipe is for bakery manufacturers to use a natural flavor,” said Liz Gabriel, bakery specialist for I.T.S.

“This helps protect against the current cost fluctuations in the cocoa market, helping to give better stability in the supply chain and of course, steadying the price of the finished product.”