Cocoa prices are currently over $8,000 per ton. Here’s why.

The cocoa market has become a little tighter.

The price of a metric ton of cocoa has risen sharply in recent months, reaching an all-time high of $11,000 per ton in April. Reported on Friday. After that, the price fell 30 percent before jumping back, to $8,700 a tonne by Thursday.

What causes mass swings? First, a poor harvest has created a supply crisis. Last year, Ivory Coast and Ghana—which account for nearly two-thirds of the planet’s cocoa—experienced plant disease, aging trees, and low rainfall, all of which led to cocoa shortages. As a result, prices increased. While the price has historically sat at around $2,500 per metric ton, Lakha said, that nearly doubled to $4,200 per ton in December — a number that had been avoided since the 1970s. And it doesn’t look like supplies are going to recover anytime soon: The International Cocoa Organization estimates that there will be a shortfall of 374,000 tonnes of cocoa this season, according to figures cited by the newspaper.

Another factor contributing to extreme prices is financial speculation, in which industry players bet that costs will rise further in the future. By February, that speculation had pushed the price above $6,000 a tonne, eventually ending at April’s peak. And while that has come down somewhat since then, it’s still well above the normal cost per ton.

The effects of the price hike are being felt by the chocolate industry itself, but so are everyday consumers. Some of the world’s biggest chocolate companies have already raised prices this year, with Hershey raising them by 5 percent and Mondelez by 6 percent. (The latter owns brands such as Toblerone and Cadbury.) Both said they would be willing to raise prices further if cocoa prices remain high.

Premium chocolate makers, though, have been largely immune to the current trend. They already pay more for their cocoa, which they source from small farms, and they charge a price that ensures the quality of their product and the fair treatment of workers in the chocolate industry.

“They market chocolate as candy,” Dan Maloney, owner of craft chocolatier Sol Cacao, said of the major companies. “We market it as a luxury item, like a bottle of wine.”

And as one bottle of wine Getting expensive, so is chocolate.

Rob ReportRob Report