Chocolate prices could soar as cocoa butter is in short supply. The lack of supply has doubled the price of cocoa butter. The increase will likely be passed on to consumers.
Last year, cocoa butter production was slowed due to excess supply. As demand has increased, there simply isn’t enough cocoa butter to go around.
As reported by Chicago Tribune, chocolate producers may have issues stocking up for the holidays. Jeff Rasinski, spokesman for Bloomer Chocolate Company, says ordering large supplies of cocoa butter may be “problematic” through the end of the year.
Companies purchasing cocoa butter between now and December will likely see the highest increase in price.
Chocolate prices have already increased in Asia due to the shortage. Most chocolatiers try to avoid price hikes. However, sometimes it is necessary.
As reported by Huffington Post, the demand for chocolate increased in recent years. In 2009, 6.9 million tons of chocolate were sold. This year, consumers are expected to purchase 7.4 million tons.
Food analyst Francisco Redruello says the increase is directly related to the recovering economy. He notes an increase in “middle class consumers buying chocolates.” Sales have increased over the last four years.
Barry Callebaut, which provides chocolate to Nestle and Hershey, may be forced to increase their prices. Spokesman Raphael Wermuth explains:
“Most prices our customers pay for our products do move as do the raw material market prices.”
Cocoa butter prices are determined by the “butter ratio.” The ratio is calculated by comparing supply and demand with London and New York cocoa futures prices.
The US butter ratio is currently 2.9. Eighteen months ago it was 1.0.
Cocoa bean prices have also increased, as rumors of a cocoa bean shortage surfaced in recent weeks. The rumors suggest a decrease in Ivory Coast production, which could cause a worldwide cocoa bean shortage.
A shortage of cocoa beans could increase chocolate prices even more.
[Image via Fotopedia]