Chocolate Prices Keep Rising

Over the past two years, chocolate prices have skyrocketed due to the global cocoa production crisis. To lower prices and boost domestic trade, the Mexican government announced the launch of Chocolates for Well-Being, which will be made using Mexican cocoa.

According to data from the Wells Fargo Agri-Food Institute, cocoa prices hit a record high of US$12,646/t in December 2024. This reflects a 26.46% increase compared to April of the same year, when cocoa reached US$10,000/t in the US futures market, nearly tripling from 2023 levels. In October 2023, prices were recorded at US$3,691/t, as reported by the International Cocoa Organization (ICCO).

David Branch, Sector Manager, Wells Fargo, pointed out that chocolate prices are expected to increase by 10-20% this Valentine’s Day compared to last year. The executive emphasized that in the past two years, the cost of manufacturing chocolate has risen by more than 167%. “It really is a mess,” Branch said in an interview with CNN.

The cocoa crisis is the result of years of adverse weather conditions in West Africa, the region that supplies 75% of global cocoa production. Notably, Ghana and Ivory Coast alone provide over 60% of the world's cocoa. This concentration makes the global market highly vulnerable to disruptions in these countries, where cocoa crops have been devastated in recent years by uncontrolled pests and aging plantations. Moreover, climate change and reduced rainfall have exacerbated the situation, leading to a 40-50% drop in production.

Branch noted that cocoa futures have surged by 143% over the past year. On Monday, cocoa futures were trading below US$10,000/t, according to the Intercontinental Exchange. However, prices remain highly volatile. “Every time it rains in West Africa, the futures market shifts. People are monitoring it that closely. There’s a lot of money on the table in this exchange,” he said. Branch added that uncertainty remains high in the market, as it is unclear whether future harvests will be able to offset the current supply deficit, while demand continues to rise.

At the national level, the "chocolates and confectionery products" category in Mexico has seen a 13% price increase over the past year, while liquid chocolate for beverages has risen by 17.36%, according to data from INEGI.

Chocolates for Well-Being

In response to soaring global chocolate prices and with the goal of ensuring fair compensation for cocoa producers in Mexico, President Claudia Sheinbaum’s administration has announced the Chocolates for Well-Being program. Under this initiative, the federal government will produce and distribute chocolates made with Mexican cocoa, which will be sold through Well-Being Stores.

By purchasing directly from cocoa producers, the government aims to eliminate middlemen, ensuring better wages and improved working conditions in the agricultural sector while also offering high-quality products at affordable prices for Mexican consumers.

The launch of Chocolates for Well-Being is part of a broader federal strategy to promote rural development and strengthen food sovereignty in Mexico. In addition to cocoa, the program includes the purchase of corn, coffee, and honey, which will be collected and later distributed through the same supply chain. The initiative will be overseen by María Luisa Albores, Minister of Well-Being.

Currently, Mexico has 24,516 Well-Being stores, present in over 90% of the country's municipalities, reaching 62 million people. In addition to coffee, chocolate, honey and corn, these stores will offer essential household goods, including vegetable oil, purified water, rice, toothpaste, canned tuna, oats, standard sugar, bleach, flake cereals, and processed chilies.