Why Chocolate are so Expensive? The Bitter Truth Unwrapped

Cocoa costs skyrocketed by nearly 300% over the past year, leading to significantly higher prices for chocolate bars, Easter treats, and cocoa powder compared to last year.

Wells Fargo Bank reported that retail chocolate prices in the U.S. were up by 20% this Valentine’s Day compared to the previous year. Specifically, the cost of a king-size Reese’s Hearts chocolate bar rose by 13% in February 2024 compared to February 2023.

In the UK, the price of a Twix white chocolate Easter egg at Tesco increased from £5 to £6 ($6.63 to $7.96) in the lead-up to Easter compared to the previous year. At the same time, its weight was downsized from 316g (11oz) to 258g (9oz). Overall, the price per unit surged by an impressive 47%.

Although the cost of cocoa – the main component in chocolate derived from roasted cacao beans – has dropped around 20% since its peak in December 2024, consumers are still facing historically high prices for chocolate.

The surge in cocoa prices can be attributed to various factors, with extreme weather being the most significant. This has severely impacted cocoa producers in West Africa, the primary source of global cocoa imports.

Amber Sawyer, an analyst at the environmental research organization Energy and Climate Intelligence Unit (ECIU), suggests that the rise in chocolate prices should not be unexpected.

She explained, "Chocolate is just one of many products seeing higher prices due to extreme weather events caused by climate change. These conditions will continue to worsen."

The prices may continue to rise as well.

How has the cost of cocoa changed?

In December 2024, benchmark New York futures contracts, which are used to trade cocoa at a set future date and price, reached a peak of $12,565 per metric ton.

The limited cocoa harvest last year resulted in unprecedented supply shortages, as unfavorable weather conditions and disease ravaged crops in Ghana and the Ivory Coast, which together produce two-thirds of the world’s cocoa beans.

Crop shortages were also reported in Nigeria and Indonesia, which are the third and fourth largest cocoa producers globally

In 2024, the global cocoa market faced a shortfall of 500,000 tonnes, contributing to the sustained rise in prices. 

According to Commerzbank analyst Carsten Fritsch, the cocoa harvest from October 2024 to March 2025 began on a positive note, with a 33 percent increase in bean arrivals at ports in the Ivory Coast compared to the previous year.

Fritsch noted that although the New York cocoa futures price is currently around $8,350 per tonne, reflecting a considerable decline since December, there are rising worries that the same dry conditions that damaged last year's crop could have a similarly harmful impact this year.

The ongoing uncertainty is affecting chocolate manufacturers. On April 11, Swiss chocolate producer Barry Callebaut revised its yearly sales projections downward, citing "unprecedented volatility" in cocoa prices. This led to a nearly 20 percent drop in its stock price, marking its largest single-day decline ever.

What is driving the increase in prices?

Weather conditions play a significant role in driving price increases. In 2023, West Africa faced extreme rainfall, with some areas receiving over twice the usual 30-year average precipitation, while 2024 saw intense heat and drought.

Climate experts largely attribute these erratic weather patterns to the El Niño phenomenon, which raises sea surface temperatures in the central and eastern tropical Pacific Ocean. However, they also anticipate a shift to the La Niña pattern – a cooling of the Pacific's central and east-central equatorial waters that occurs every three to five years – which may temporarily boost cocoa yields.

In fact, the International Cocoa Organization predicted a global cocoa surplus of 142,000 megatonnes for the 2024-25 season, marking the first surplus in four years. This partly explains the recent drop in prices.

However, Felipe Pohlmann Gonzaga, a commodity trader based in Switzerland, warns that the broader issue of climate change will only exacerbate supply concerns in the long run.

A study published this year by scientists from the research group Climate Central revealed that climate change has negatively affected cacao trees during the harvest season in the Ivory Coast and Ghana.

Legislation to combat deforestation

In addition to shifting weather patterns, several other factors are contributing to the recent rise in cocoa prices.

New deforestation regulations across West Africa have restricted farmers from expanding cocoa plantations, limiting supply.

The region is also facing an aging cocoa tree population. "Older trees are not being replaced," Pohlmann Gonzaga explained to Al Jazeera. "The industry has suffered from under-investment."

Disease

Meanwhile, the proliferation of the cocoa swollen shoot virus (CSSV) has impacted harvests. Tropical Research Services, a market research organization, recently discovered that cocoa production in the Ivory Coast could be reduced by half due to the ongoing spread of CSSV.

Illegal gold mining

At the same time, many cocoa farmers in Ghana are turning to illegal gold mining, which has negatively impacted the country’s cocoa production and contributed to rising prices.

In recent months, investors have flocked to gold as a safe haven, seeking protection from the financial instability caused by the trade tariffs imposed by U.S. President Donald Trump. On April 16, the price of gold soared to $3,357 per ounce, marking a new high.

Consequently, many farmers are selling their land to illegal miners, who have ravaged large areas in their quest for gold. Ghana stands as Africa's top gold producer and ranks as the sixth-largest globally.

Are cocoa prices expected to keep increasing?

"Tariffs have affected the value of commodities, and cocoa is no exception," says Pohlmann Gonzaga. "Initially, it might seem that trade tariffs would lower cocoa demand in the US, which is a major consumer." While the US is the largest chocolate consumer globally, the Swiss hold the title for the highest per-capita consumption.

"However, if US consumption continues, it could drive prices up. Additionally, if Trump decides to lift tariffs on West African cocoa exporters in the future, it would likely lead to increased demand."

Pohlmann Gonzaga pointed to the rising demand for chocolate in East Asia. "We might be witnessing a trend similar to what happened with coffee," he explained. For example, China’s coffee consumption grew by over 60 percent between 2019 and 2024.

In the short term, Pohlmann Gonzaga mentioned that prices are expected to remain relatively stable, as these factors may offset each other. He also noted that volatility will be the defining characteristic for this year.

How have chocolate producers reacted?

So far, producers have taken one of two main approaches to dealing with rising cocoa prices: either passing the increased costs on to consumers or promoting products that use less cocoa or alternative ingredients.

In 2023, Nestlé responded by adding a hazelnut flavor to its Aero range in the UK. These bars, weighing just 36g (1.3oz), are roughly a third the size of standard chocolate bars.

In 2024, agri-food giant Cargill teamed up with U.S.-based Voyage Foods — a company that makes cocoa-free chocolate alternatives using ingredients like grape seeds, sunflower flour, and other flavorings. Under this partnership, Cargill will serve as Voyage Foods’ B2B distributor.

Beyond major corporations, startups such as Nukoko and Planet A are experimenting with microbial fermentation to recreate the distinctive flavors and scents of chocolate without using cocoa.

Meanwhile, Dubai Chocolate, founded in 2022, has gained popularity on social media with its innovative confections. The brand infuses its sweets with pistachio and tahini, drawing inspiration from kunafa — a sweet, cheesy dessert beloved throughout the Middle East and North Africa.

“If cocoa prices keep climbing, I expect we’ll see more cocoa alternatives appearing in stores,” said Pohlmann Gonzaga. “The real question is whether consumers will adapt their tastes accordingly.”