Record-high cocoa prices are leading chocolate buyers to delay their purchases and seek to renegotiate pricing, according to Swiss chocolate maker Barry Callebaut.
Cocoa prices have surged nearly threefold over the past year due to extreme weather conditions and diseases affecting harvests in the Ivory Coast and Ghana, which together account for two-thirds of the world’s cocoa production.
Barry Callebaut’s report follows three consecutive global cocoa deficits, which have driven prices to “astronomical levels,” according to Oran van Dort, commodity analyst at Rabobank. Van Dort also warned of the possibility of another cocoa deficit in the upcoming season.
“The expectation, since the initial price rally began, is that these costs will be passed on to consumers, either directly through higher chocolate prices or indirectly as manufacturers adopt shrinkflation and skimpflation strategies,” van Dort noted.
In its latest report, Barry Callebaut revealed a drop in chocolate sales for the three months ending November 30, although the company still managed to increase sales revenue. Analysts believe this was largely due to the company’s strategy of passing higher costs onto customers.
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