Section 1.1: The Role of El Niño

The El Niño weather phenomenon had a particularly devastating effect on cocoa crops last year, marking one of the most extreme events recorded. Cocoa is predominantly cultivated in West Africa, especially in the Ivory Coast, which alone accounts for 43% of the global cocoa supply.

The climatic conditions brought about by El Niño in 2023 led to unprecedented challenges for cocoa farmers. November 2023 saw the Ivory Coast experience its wettest November in over six decades, followed by drought conditions in 2024, severely impacting the cocoa yield.

As if that weren't enough, the excessive rainfall contributed to the spread of Black Pod disease, a fungal infection that causes cocoa to rot, and the Swollen Shoot Virus, further complicating the situation for farmers.

Subsection 1.1.1: The Economic Landscape

In addition to environmental challenges, political factors also play a crucial role. The governments of Ivory Coast and Ghana, the leading cocoa producers, dictate the selling prices of cocoa, leaving farmers at a disadvantage. The small profit margins discourage investment in essential resources like fertilizers, which leads to disease and declining crop quality.

Tracey Allen, an Agricultural Commodities Strategist at J.P. Morgan, notes that cocoa growers produce a high-value product but receive a minuscule share of the profits, resulting in aging cocoa trees and low replanting rates.

Section 1.2: The Future of Chocolate Pricing

As we look ahead, it seems that chocolate prices will keep climbing. The dual challenges of climate change and governmental restrictions on production are not likely to resolve anytime soon. Our primary cocoa suppliers are struggling to keep up with demand and are unable to expand their operations.

While it might seem trivial to lament the rising costs of chocolate—often viewed as a luxury item—these price hikes reflect broader issues, such as the effects of climate change and the exploitation of farmers.