Bad news for all chocolate lovers in the country. Since the cocoa harvest has been poor recently, the world market price has multiplied this year. The chocolate manufacturers now have to purchase significantly more expensive products. This will also have a huge impact on prices in stores.
“The chocolate companies have their backs against the wall,” says Fairtrade Austria director Hartwig Kirner. Many of the large and small producers now have to buy cocoa again and sign contracts for this. However, recent poor harvests have caused prices on the world market to rise dramatically.
While this has always been between 2,000 and 3,000 dollars per tonne in recent years, this year it has even risen to more than 11,000 dollars. Recently the price has fallen to just under $8,000 (see chart).
Empty warehouses and too little supply
This means that chocolate manufacturers have to dig considerably deeper into their pockets. Even though cocoa prices in the important production countries Ghana and Ivory Coast are regulated by the state, international commodity traders demand market prices. “Chocolate will have to become significantly more expensive,” Kirner summarizes.
To what extent also depends on the extent to which the increased costs can be passed on to retailers. In addition to their own products, many chocolate manufacturers also produce private labels. Kirner: “As a producer you absolutely cannot ignore it.”
Fairtrade sales continued to rise last year
In any case, fair food remains very popular among Austrians. The turnover of products with the Fairtrade quality seal increased by around twelve percent last year to around 663 million euros. One driver drove chocolate and cocoa, among other things.
For example, confectionery manufacturer Manner (at Casali) and the discounters Hofer and Action have switched other own brands to ‘Fairtrade cocoa’. But the coffee segment has also developed steadily as more and more products in the premium segment are certified. When it comes to bananas, one in three is already Fairtrade and 96 percent of them are ‘organic’. In roses, which achieved record turnover in Corona times and then fell sharply, business also rose again (+7.9 percent). Here we are slowly approaching pre-crisis levels. In total, there are already 2,500 products in this country with the Fairtrade quality mark and more than 2,000 cafes, bakeries, hotels, restaurants or canteens that offer ‘fair’ food.
Nearly $80 million in direct income for farm families
Extreme weather, crop failures, supply bottlenecks and higher costs are putting enormous pressure on the incomes of small farming families in Africa, Asia and Latin America. Fairtrade sales in Austria recently provided nearly $80 million (+9 percent) in direct payments to producer communities. Community projects (well construction, schools, infrastructure, etc.) can be financed with premiums that go beyond the minimum prices.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
