The price of cocoa has fallen drastically from the peak reading. The research professor believes that the normal prices of chocolate will still not fall.
The price of cocoa has fallen, but you can’t get chocolate cheaper in the store. ILLUSTRATION PICTURE. Pete Anikari
Cocoa futures prices are in a clear decline. You might think that means that the price of chocolate sold in the store has decreased. This has not happened so far, but at the same time the price of chocolate continues to rise.
Cocoa is mostly traded in futures, i.e. the price is locked in advance, even though the crops will only be sold in the future.
– Yes, the price of cocoa has come down drastically. The cocoa futures price was up to $11,000 per ton. Now the last prices are already close to 3,000 dollars, says the research professor of the Natural Resources Institute Jyrki Niemi.
– If you look at cocoa futures prices from now on, they predict a price of $3,500 for cocoa.
According to Niemi’s assessment, we will no longer see a large price increase.
– I believe that the peak cocoa prices have come down, at least for the time being, Niemi says.
Why doesn’t the price of chocolate go down?
So the price of cocoa is falling, but at the same time the price of chocolate in stores has only continued to rise.
– The price of chocolate will hardly drop to what it was before, despite the drop in the price of cocoa, Niemi estimates.
The price reduction of cocoa will be reflected in the store and in the price of chocolate only after a delay.
– The biggest reason is certainly the fact that cocoa is bought and contracts are made even 6-12 months in advance. So now we are using cocoa stocks that were bought at an expensive price, Niemi estimates.
– If the price of raw cocoa stays around $3,500, the store will see a price drop at the turn of the year or next year.
Niemi believes that the normal prices of chocolate will not drop, but more promotional campaigns will be seen in stores.
– After all, cocoa is an important part of chocolate, but cocoa is not the only cost associated with chocolate production. The price of sweets is also affected by other raw materials, the price of energy, labor, packaging and transportation, Niemi reminds.
I saw a lot of “extras” in the price
According to Nieme, the share of cocoa, i.e. raw cocoa and cocoa butter, in the price of chocolate paid by the consumer was up to 30 percent during the price spike.
– Even if the price of cocoa for chocolate manufacturers drops by an average of 70 percent, the effect on the price of chocolate is roughly minus 20 percent. So it can be said that at the moment there is an estimated 15−25 percent “extra” in chocolate compared to the current price of cocoa. But as I said, the chocolate companies buy cocoa in advance with futures. So now we are still using stocks that were bought at a high price, he says.