The cocoa price has doubled in mere months, but it shouldn’t add much to the price of chocolate: here’s why

• So it would be natural to expect the price of chocolate to soar, and to expect cocoa growers to get more.
• But, as surprising as it seems, my calculations suggest neither is likely, although we can certainly expect the price of chocolate to rise.
• The price of cocoa is soaring because intense heat and rains have hit harvests in West Africa.
• But it does mean the recent explosion in cocoa prices doesn’t explain much about what’s happened to the price of chocolate.

Higher prices no bonanza for growers

• Many of the 800,000 cocoa farmers in Ghana survive on just US$2 a day.
• The average cocoa farm in West Africa is just three to four hectares, producing less than one tonne per year.

Farmers don’t get futures prices

• And the higher futures prices might not last.
• If traders become less worried about prices going up, the current high futures prices could fall before they get fed into the prices paid to growers.
• As well, farmers get very little of the price – on one estimate only 6–7% of the price.
• I look forward to the day when a chocolate company says its prices are going up because it has decided to give the farmers who grow its cocoa a living income.

Darian McBain is affiliated with Be Slavery Free Australia.