It’s a bittersweet Easter for chocolate lovers and African cocoa farmers but big brands see profits Associated Press

By Associated Press

Shoppers may get a bitter surprise in their Easter baskets this year.

Chocolate eggs and bunnies are more expensive than ever as changing climate patterns eat into global cocoa supplies and the earnings of farmers in West Africa.

About three-quarters of the world’s cocoa — the main ingredient in chocolate — are produced on cacao trees in Ghana, Ivory Coast, Nigeria and Cameroon. But dusty seasonal winds from the Sahara were severe in recent months, blocking out the sunlight needed for bean pods to grow. The season prior, heavy rainfall spread a rotting disease.

With exports from the Ivory Coast, the world’s top producer, down by a third in recent months, the global price of cocoa has risen sharply.

Cocoa futures /zigman2/quotes/209712848/delayed CC00 +1.21% have already doubled this year, trading at a record high of more than $10,000 per metric ton in New York on Tuesday after rising more than 60% the previous year.

Farmers who harvest cacao beans say the increases aren’t enough to cover their lower yields and higher production costs.

Yet the high Easter demand for chocolate carries a potential treat for big confectionery companies. Major global makers in Europe and the United States have more than passed on the rise in cocoa prices to consumers.

Net profit margins at The Hershey Company /zigman2/quotes/202765576/composite HSY -0.53% increased to 16.7% in 2023 from 15.8% in 2022. Mondelez International /zigman2/quotes/201769764/composite MDLZ -0.27% , which owns the Toblerone and Cadbury brands, reported a jump to 13.8% in 2023 from 8.6% the year before.

“It is likely consumers will see a price spike on chocolate candy this Easter,” Wells Fargo said in a report this month.

Mondelez said it raised chocolate prices up to 15% last year and would consider additional price hikes to help meet 2024 revenue growth forecasts.

“Pricing is clearly a key component of this plan,” Chief Financial Officer Luca Zaramella said in January. “Its contribution will be a little bit less than we have seen in 2023, but it is higher than an average year.”

Hershey’s also raised prices on its products last year and has not ruled out making further increases. “Given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business,” Hershey Chairman, President and CEO Michele Buck said during a conference call with investors last month.

Consumer groups are keeping track. In the United Kingdom, British consumer research and services company Which? found that chocolate Easter eggs and bunnies from popular brands like Lindt and Toblerone cost about 50% more this year. It said some candy eggs were smaller, too.

Cocoa is traded on a regulated, global market. Farmers sell to local dealers or processing plants, who then sell cocoa products to global chocolate companies. Prices are set up to a year in advance. Many farmers blame climate change for their poor crops. Cacao trees only grow close to the equator and are especially sensitive to changes in weather.

“The harmattan was severe at the time the pods were supposed to develop,” Fiifi Boafo, a spokesperson at the Ghana Cocoa Board, said, referring to the cool trade winds that carry enough dust to block out the sunlight needed for the trees to flower and produce beans.

Months of rain also are being blamed for black pod disease, a fungal infection that thrives in cooler, wet and cloudy weather, and causes pods to rot and harden.

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