Chocolate set to make it even more expensive – but the outlook for 2026 looks sweet

Chocolate enthusiasts are facing another price hike due to the delays that the cocoa market hit retailers, but better news may be available until the next Easter.

Cocoa prices have skyrocketed in recent years, reaching record highs amid harmful weather conditions, pest outbreaks and the strength of West Africa’s supply, which has produced about a quarter of the global supply.

That trend, combined with wider retail price inflation around the world, drives up consumer costs and reduces the demand for sweet treats in the process. Surveyed by UK Consumer Group Chocolate products in 2024 were the category with the highest average annual inflation rate for grocery stores last year, at 11%. In the US, prices for popular products such as Hershey’s Kiss also increased by around 12% year-on-year.

Adalbert Rechner, head of the Swiss giants lindt & sprünglitold CNBC in April that he didn’t think the price of cocoa would “return to its previous level.”

Cocoa futures are choppy, but overall ease this year, down from $8,177 per metric tonne at the beginning of January to about $7,855 in August. This is compared to $2,374 three years ago.

According to Tracey Allen, agriculture commodity strategist at JP Morgan, the recent decline is not seen at chocolate prices in the short term.

“There’s a bit of a hangover going on here,” Allen told CNBC’s “Squawk Box Europe” on Thursday.

The Chocolatier is still handling the rise in cocoa prices from the fourth quarter of 2024, when it saw a record high, she said.

“These price increases have had a lagging impact that has taken this trend across the industry,” she said, bringing the cost of taking over the business to consumers. “There is this continuous deficit in the market, a major depletion of cocoa bean availability, and product availability.

But the outlook may be a little brighter in time for the busy Easter season, she noted.

According to JP Morgan analysis, industrial demand from manufacturers has improved supply, increased production and improved supply as new plantings in Ecuador and Brazil are mature, but cocoa prices continue to be structurally high at $6,000 per metric tonne.

Hamad Hussain, climate and commodity economist at Capital Economics, tells CNBC that, even as the weather in West Africa improves over the coming months, long-standing productivity challenges such as illness and long-standing underinvestment in the world’s largest cocoa producers, Ivory Coast and Ghana, are the world’s largest cocoa producers.

“It would raise prices at a historically high level. Historically high cocoa prices could support chocolate prices,” he said.

He also noted other factors that could boost costs on both sides of the Atlantic.

In the UK, businesses face higher costs, from hiking to minimum wage and employee contributions. Hussein says it is being fed to prices for foods that contain chocolate.

Meanwhile, in the US, he said the impact of tariffs could put upward pressure on chocolate prices over the coming months.

“The outcome is that consumers are likely to face high chocolate prices for some time,” he said.

– CNBC’s Sam Meredith contributed to this story.