OH NO!!! - Why there may not be enough chocolate in the world anymore

Fotolia A shortfall in the production of cocoa has already taken a bite out of Canadian chocolate retailers in the form of higher prices.


CALGARY – Canadian chocolate makers and confectioners should take Forrest Gump’s famous words to heart — albeit with one small tweak. The commodity market is like a box of chocolates, you never know what you’re gonna get.

Indeed, global chocolate production last year was aided by what Purdys Chocolatier president Peter Higgins calls an unexpectedly good harvest of cocoa beans. That harvest was necessary to satisfy a growing appetite for chocolate in developing countries, where there’s an increasing demand for the delicacy North Americans take daily for granted.
Uncertainty about this year’s cocoa harvest, however, is a cause for concern — no one is quite sure what we’re gonna get.

Data from the International Cocoa Organization (ICCO), which tracks the supply and demand for cocoa on various world commodity exchanges, shows that the production of the beans is hard pressed to meet the demand for the confection.
Just weeks before our culture’s biggest candy feast of the year, Canadian chocolate executives met with their global counterparts in Copenhagen on Thursday and Friday to find a solution to a frightening reality: There may not be enough chocolate in the world.




KAMBOU SIA/AFP/Getty ImagesCocoa is one of the four main ingredients used to make chocolate, but its supply has been steadily declining as mature cacao trees — or cocoa trees — in West Africa have become increasingly unproductive in recent years.
A shortfall in the production of cocoa has already taken a bite out of Canadian chocolate retailers in the form of higher prices.

“Just like anybody else, we are paying slightly more,” said Kristen Halpen, marketing manager for Calgary-based Cococo Chocolatiers Inc., the parent company for Chocolaterie Bernard Callebaut. Company president Brian Beck was in Denmark for the conference, which focused on finding ways to help West African farmers increase their production of cocoa and thereby satisfy the growing global hunger for their product.

Cocoa is one of the four main ingredients used to make chocolate, but its supply has been steadily declining as mature cacao trees — or cocoa trees — in West Africa have become increasingly unproductive in recent years. A coalition of chocolate companies called the World Cocoa Foundation formed a task force called CocoaAction this past May to help West African farmers boost their cocoa yields.

Since May, however, yet another complication began to threaten cocoa production in West Africa: the spread of the Ebola virus.

The Ebola outbreak led to restrictions on the flow of labour and goods in and out of many West African countries, just as the cocoa harvest was set to begin. At one point there were 19 confirmed cases of Ebola in Nigeria, a cocoa-producing country, threatening the local population and its agricultural exports.

The world’s largest cocoa-producing country is Cote d’Ivoire and it borders both Liberia and Guinea, which are two of the nations hardest hit by the outbreak of the fatal disease.
A statement released Friday by the ICCO said “Current international cocoa prices seem to have factored in the Ebola issue and, in the absence of a major negative development, we do not expect significant disruption in the market in the medium term.”



ISSOUF SANOGO/AFP/Getty Images The world’s largest cocoa-producing country is Cote d’Ivoire and it borders both Liberia and Guinea, which are two of the nations hardest hit by the outbreak of the fatal disease.


ICE cocoa futures jumped US$32 on Friday afternoon to US$3,118 per cubic tonne for December delivery. “The main harvest for cocoa, which runs from October to March in Cote d’Ivoire, is currently well under way, and stakeholders are making all efforts to ship cocoa from the country as soon as it is available,” the notice said.

“The price of cocoa beans is almost always hovering around US$3,000 per metric tonne,” said Brad Churchill, owner of Calgary-based Choklat, which makes 400 pounds of chocolate per week from scratch — unlike other chocolate companies that buy their chocolate from Nestle SA, Cargill Foods or Barry Callebaut AG.


Mr. Churchill buys his beans directly from cocoa farmers and says that the bean “is actually a fairly stable commodity,” especially for those who buy direct. As cocoa is just one of the four ingredients in chocolate, a metric tonne of the bean can produce US$40,000 worth of end product, he says, which dampens the effect of a spike in bean prices. A jump in the cocoa price might not be as devastating for a chocolate maker as it would be for a producer.

For retail companies that buy chocolate from wholesalers like Nestle, however, a jump in cocoa prices could have a material impact on the sticker price of the confection.

Just like anybody else, we are paying slightly more

The price of cocoa, and therefore the price of chocolate, could jump much higher that its current US$3,118 level. An executive from the World Cocoa Foundation told reporters in Copenhagen this week that cocoa prices could more than double — to between US$6,000 and US$8,000 per cubic tonne — if cocoa farms don’t start producing more.

As a result, chocolate companies from around the world are looking for ways to make the supply of cocoa beans a little bit more stable and predictable.

To satisfy rising world chocolate demand, members of the World Cocoa Foundation are embarking on a multi-year campaign to teach West African farmers new fertilizing, tree pruning and other techniques that would help increase cocoa production.
“It’s really a question of long-term sustainability,” Mr. Higgins said. “How do we help them increase their yields and in turn improve their livelihoods and help meet the global estimation of cocoa for the future?”

Mr. Higgins was in Cote d’Ivoire in July and said that it’s difficult to convince farmers in the region to cut down old trees that continue to produce at least some cocoa beans, in favour of young saplings that take several years to start bearing fruit.

In fact, one of the world’s largest buyers of cocoa, Nestle SA, has even begun handing out young cocoa trees to farmers for free. On Thursday, Nestle and its partners in CocoaAction agreed to reach out to 300,000 cocoa farmers by 2020 to help them implement new fertilizing and tree-rehabilitation programs on their land.

“Other major factors are proper techniques for pruning, shade management,” Mr. Higgins said. “That will increase the productivity of a cocoa tree 30%.”

That would have a positive impact on prices paid by both Mr. Higgins and Cococo Chocolatier’s Ms. Halpen. It would also eliminate some of the uncertainty around global cocoa supply — so Canadian chocolate companies will know what they’re going to get come harvest season.


http://business.financialpost.com/2014/10/18/cocoa-production-crisis-taking-bite-out-of-chocolate-retailers/

I was watching the news when it was announced that they would not allow imports from Ebola infected regions. Although I am a chocaholic, I still felt for them before realizing what was happening with my addiction. But, even without the bad news it is crop management that was already affecting production.