Chocolate lovers had better start stocking up, as the world's largest manufacturer of the sweet stuff is warning of a cocoa shortage by the end of the decade.
Switzerland-based Barry Callebaut Group reports a 25 per cent increase in cocoa prices for the year ending August 31, despite a crop surplus from the world's two largest cocoa producers, Cote d'Ivoire and Ghana.
But the Ebola outbreak in West Africa combined with environmental pressures on crops, in addition to market concerns, have chocolate-makers worried about a global shortage of cocoa by 2020.
Executives at Mars issued the first warning about a potential shortage of as many as one million tonnes two years ago. That concern has now been picked up by Barry Callebaut Group CEO Juergen Steinemann, who expressed his own fears in the company's annual report issued earlier this month.
The "bullish momentum" has prevailed in the cocoa market, the report noted, despite the bumper crops.
"It has been fuelled by fears related to the Ebola outbreak in some West-African countries bordering Côte d’Ivoire and Ghana, el Niño forecasts, a potential cocoa shortage by 2020, as well as financial speculation," the report said.
As a result, cocoa prices skyrocketed from 1,600 pounds per tonne at the beginning of the fiscal year to 2,000 pounds per tonne by the end of August.
The firm's own sales volume increased nearly 12 per cent over that time, to 1,716,766 tonnes, the report noted.
The World Cocoa Foundation reports that cocoa production faces a number of challenges that can impede productivity and threaten crops. These include rural farmers' lack of access to funding for modern farming equipment; aging trees that are past peak cocoa pod production; a decline in soil fertility; and "pests and disease that attack cocoa trees."
"In all three major growing regions," the foundation says, "an estimated 30 to 40 per cent of the crop is lost to pests and disease."
