Confectioners are having a hard time – Kommersant FM

Chocolate may become more expensive in Russia. According to Kommersant FM’s interlocutors, at the end of the year the cost of confectionery products will rise by at least a third compared to 2022. Prices for cocoa beans on the Intercontinental Commodity Exchange exceeded $3.7 thousand per ton. This is a record for more than 40 years, American media reported. It’s all about the low cocoa yield. African commodity-producing countries – Ivory Coast, Ghana, Cameroon and Nigeria – are facing heat and drought due to the El Niño weather phenomenon.

The situation with the harvest will inevitably affect the cost of production, noted Vitaly Muravyov, president of the Pobeda confectionery factory:

“We all rely on the prices of the London Stock Exchange, where trading is carried out in pounds. The story there is that prices have risen by almost 50% in a year. If in 2022 at the same time a ton of cocoa beans cost about 1.8 thousand pounds, now it is already about 3 thousand pounds.

The situation is due to the fact that for the third year in a row a small harvest of cocoa beans has been harvested. Prices began to rise in the spring of 2023.

Many companies are expecting prices to decline closer to harvest. But this does not happen, the forecast for production volume only becomes lower, and those who did not contract supplies, expecting that the cost of goods will fall, go to the stock exchange, make deals, thereby further inflating prices. It is clear that even those who entered into agreements in advance will still get it.

I expect that at the end of 2023 and the beginning of 2024 we will see an increase in prices for cocoa products and, accordingly, for chocolate, by 35-50 percent.”

At the same time, the rise in chocolate prices, according to Kommersant FM’s interlocutors, will be gradual, since some companies retain cocoa stocks purchased at old prices. In addition, a lot depends on the type of product, noted Irina Eldarkhanova, Chairman of the Board of Directors of the Confael group of companies:

“In a chocolate bar, cocoa products on average range from 60% to 90%, but, accordingly, production costs are low, because this is a fairly automated process. I assume that in the end there may be a 30-40% increase in price.

For products that contain less cocoa beans, for example, candies, prices will rise less, by 30 percent, if other ingredients do not rise in price. And if you add to this an increase in wages for workers in production up to 30%, then an increase in prices of 30%-50% is absolutely realistic.”

However, the weather phenomenon, due to which the cocoa harvest fell, will continue until the summer of 2024, forecasters predict. So confectionery manufacturers expect that chocolate will continue to rise in price at the beginning of next year.

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Elena Ivanova