998. Climate Change and Chocolate

The price of cocoa, the raw material for chocolate, has risen sharply in recent months. According to commodity price statistics compiled by the World Bank, the price of cocoa, which was USD2.75 per kilo in March 2023, rose by 158% to USD7.09 in March 2024. The United Nations Conference on Trade and Development (UNCTAD) points to the impact of climate change as the reason behind the recent surge in cocoa prices.

Cocoa production is concentrated in areas close to the equator. In West Africa, which accounts for three-quarters of global cocoa production, extreme weather events such as heat waves and heavy rains, as well as climate change, have hit cocoa yields for the past three consecutive years, reducing the incomes of many small farmers. For example, the heavy rains that hit Ghana and Côte d'Ivoire in the last quarter of 2023 caused the spread of the swollen shoot virus, affecting cocoa growth and yield, and black pod, a fungal disease of cocoa trees, causing cocoa beans to rot and harden and resulting in severe yield losses.

Production damage in Ghana and Côte d'Ivoire, which accounted for 58% of global cocoa production in 2022 and 2023, has also affected the global market. An international cocoa industry association has predicted that the world will experience a supply shortage of 374,000 tons in the 2023–2024 fiscal year. For comparison, the shortage in the previous period was 74,000 tons. UNCTAD economists explained that global demand for cocoa is price inelastic (i.e., price changes have little effect on consumer demand) and that supply shocks lead to higher prices. In the futures market, the price per ton of cocoa reportedly exceeded USD10,000 for the first time on March 26. This impact is expected to spill over to retail prices, leading to inflation and an increase in the cost of living.

UNCTAD experts warn that the surging price of cocoa is just one example of the magnitude of the socio-economic impact of climate change, emphasizing the urgency of climate action.

Contributor: IIYAMA Miyuki (Information Program)