Follow the money: Why does chocolate cost so much?

Hannah Mullane (0:03)

We start today's program in the supermarket, in my favorite spot, the chocolate aisle. All the fan favorites are here. There's Cadbury's, Kit Kat's, Tocoro's, and you might have noticed that the cost of these sweet treats has increased over the last few years. One of the reasons for that is the price of cocoa. It's the most important ingredient in making chocolate, and in 2024, prices spiked to record highs of more than $12,000 per tonne, four times the average price. Some chocolate makers made bars smaller, others changed their recipe to use less cocoa. Now cocoa prices are coming down, but the cost of chocolate isn't. I'm Hannah Mullane, and today on Follow the Money on Business Daily, I'm going to be looking at what's going on with the cocoa price, and asking why the chocolate price is still so high.

To find out why the cocoa price went up so dramatically, we need to head back to 2023, when the El Niño weather phenomenon hit West Africa. The region saw heavy rains and severe flooding, triggering black pod fungal disease, rotting cocoa pods directly on trees.

The region produces more than 60% of the world's cocoa, so when a major weather event impacts the harvest, it hits global prices. Suddenly, there wasn't enough cocoa to go round, sending what had been steady prices of around $3,000 per ton, up to the highest ever seen at $12,000. Since then, the prices come back down to around $6,000 per ton. But another El Nino has arrived in recent weeks, potentially bringing more disruption, another bad harvest, and more stress on the farmers growing the crop.

Moses Janosadu (1:51)

Personally, you know, you depend. You're a source of livelihood.

You have a lot of expenses to meet. Managing yourself is not easy. As a cocoa farmer, you have to grow a lot of responsibilities. You can imagine the kind of trauma that we go through.

Hannah Mullane (2:07)

Moses Janosadu used to grow cocoa on about 15 acres of land on his farm in Ghana, but he lost over half of it to disease. So he now manages five acres, which in a good year produces around two tonnes of cocoa. He's also the administrator of the Ghana Cooperative Cocoa Farmers and Marketing Association.

Moses Janosadu (2:26)

We have this international system that establishes international cocoa price, daily prices, based on demand and supply. And this pricing system has been fluctuating. It goes up, it comes down. At the beginning of the cocoa season, the government gave out a price. And unfortunately, along this year, the price at the international level went down. And farmers protested, but that is what we're giving.

Hannah Mullane (2:52)

So when the cocoa prices went really, really high in 2024 and 2025, you weren't able to get a good price for your beans then either?

Moses Janosadu (3:03)

Even at that time, the government of the day gave a price of about $10,000, but it didn't come as we expected because the government threw the sales arrangement that they have. Even at the time that the price went up, there were no cocoa beans available to be sold. And the government convinced farmers that when they come, they will give the international price and all those things were just misleading statements that were made. Nothing has happened. They are even worse off.

Hannah Mullane (3:33)

It must be hard to know that in other countries, you can make much more money from the cocoa beans than you can in Ghana because of the way the prices are set.

Moses Janosadu (3:43)

Sure. We are in touch with our colleagues in Cote d'Ivoire, and we know what exactly happens over there, because sometimes, even when the government has set a price, they are able to negotiate for higher prices in good times. But in our case, it's not like that. I'm telling you, the cocoa business is not easy, and you will invest so much in it, and the cost of production is very expensive. Getting labour to do the kind of work you have to do to maintain your farm is difficult and very expensive now.

Hannah Mullane (4:13)

And what do you think about the big confectionary companies around the world? Are they paying enough for the cocoa, do you think?

Moses Janosadu (4:19)

They are not paying enough. They are not paying enough. Because like in Ghana, in Ghana we have moneyless, we have cargo, we have all of them. But it is the price that the government gives. If the system that the world uses to determine the cocoa prices is not dealt with, is not looked at, I believe that there is no fairness at all.

Hannah Mullane (4:41)