The year 2024 is shaping up to be challenging for chocolate lovers in the United States. As cocoa prices continue to surge, consumers can expect to see a significant increase in the cost of their favorite sweet treat. This surge in prices is due to a combination of factors, including supply shortages and increasing demand for cocoa. Over the past two years, chocolate prices in the US have risen by a staggering 17%. The price of butter, which accounts for approximately 20% of the weight of an average chocolate bar, has reached a record high. This increase in the cost of butter has had a direct impact on the overall price of chocolate products, leading to higher prices for consumers. 

The surge in prices is attributed to disruptions in supply and demand, including severe El Niño-induced dry weather conditions, wildfires, and the cacao swollen shoot virus outbreak. Demand has remained strong in countries like the U.S., helping companies like Hershey's and Mondelez better offload rising prices onto consumers. The Ivory Coast's hotter-than-usual temperatures could extend its lack of abundant rainfall, leading to subpar beans in size and quality.

Source- Cocoa prices surge to all-time highs as bad weather hurts West Africa crop yield (

One of the main reasons behind the surge in cocoa prices is a global supply shortfall. Cocoa, the key ingredient in chocolate, is primarily grown in West Africa, where supply disruptions and issues with weather conditions and pests have led to a decrease in production. This decrease in supply has created a significant imbalance in the cocoa market, driving up prices. Analysts are predicting that the situation will worsen in the coming months.

The cocoa market has seen a 5.9% increase in the most active contract in New York, reaching $8,493 a metric ton, the highest on record. This rally is boosting costs for consumers and sending chocolate makers scouring for supply. Some bars are getting more expensive, smaller, or filled with other flavors to blunt the impact. Lindt & Spruengli AG's chief financial officer, Martin Hug, said it is difficult to predict what will happen with the cocoa market.

Cocoa costs are expected to stay higher for longer as crops in West Africa have been battered by diseases and weather extremes, putting the world on track for a third straight supply deficit.

A below-normal pace of deliveries to ports in top grower Ivory Coast has continued to propel prices upward, and looming environmental regulations for European importers are adding to the hurdles for sourcing beans. Citi Research analysts have previously said prices could reach as high as $10,000 a ton and remain elevated until the second half of 2025. Processing plants are already suffering from shutdowns, which should lead to significant deterioration in cocoa grinding data.

It is important to note that the surging cocoa prices are not solely a consumer problem. Chocolate manufacturers and businesses that rely on cocoa as a primary ingredient are also feeling the strain. The increase in raw material costs presents a major challenge for these companies, as they must either absorb the higher costs or pass them on to consumers in the form of increased prices. In response to the rising prices, some chocolate manufacturers have already started to make changes to their products. They are reducing the size of their chocolate bars or using alternative ingredients to offset the higher costs of cocoa and butter. However, these adjustments can only go so far, and consumers will inevitably feel the impact in their wallets. Big chocolate businesses like Hershey's and Cadbury producer Mondelez have been passing these expenses on to customers, with Hershey's net profit margins rising to 16.7% in 2023 from 15.8% in 2022, and Mondelez reporting a 13.8% increase from 8.6% in 2022. Both corporations reported lower sales volumes in the most recent quarters, as consumers grew tired of paying rising food prices.