Tony’s Chocolonely confirms need for retail price rises as cocoa sector supply challenges continue

Tony’s Chocolonely, the Dutch-founded impact confectionery brand, has informed consumers on its decision to raise prices across its group, as its cocoa supply chains face continued major challenges with farmers’ yet to reach a living income and renewed crop diseases hit yields, reports Neill Barston.

The business, which is set to be among keynote speakers at our World Confectionery Conference on 12 September in Brussels, Belgium outlined what it described as a key requirement to increase the cost per bar in response to major pressures facing agriculture producing nations in West Africa.

According to reports by Reuters, a key cocoa area within the Ghana, which is the second largest country serving the chocolate confectionery supply chain, has been deeply affected by swollen shoot disease, with as much as 81% of crops blighted. It also thought that as much as 30% of yields in neighbouring Ivory Coast could also be affected, though official records are not presently available in the country.

In a statement on its latest position, Tony’s noted that the rapid rise in cocoa prices on Futures markets in New York and London (which earlier this year saw values skyrocket to $12,000 a tonne), and have remained comparatively high, representing increases of well over 200% on values of just 18 months ago. As reported by Confectionery Production, Ghana and Ivory Coast governments raised prices by more than 50% for farmers from a notably low base, to a figure of $2.47 a tonne, which is still less than a third of what is being attained on global markets.

The company said: “The market price for cocoa is at an all-time high due to massive cocoa shortages. It used to sit around €3000 per metric ton, but now it’s around €10,000 per metric ton – a whopping 233% increase.

“While we’d normally celebrate a higher price for cocoa, a higher price on the trading market doesn’t necessarily mean higher prices are being paid to cocoa farmers for the long-term. Though Ghana + Côte d’Ivoire announced that their farmers will benefit from sky-high cocoa prices for the rest of the 2024 cocoa season, the bitter reality is that most farmers are still unable to earn a living income.

“Why? Because farmers are producing about 30% less cocoa due to severe droughts, ageing cocoa trees and, most importantly, climate change. This means that even though cocoa farmers are being paid more, they’re selling way less. Making it impossible for millions of them to escape poverty.

“That’s why our 5 Sourcing Principles don’t just revolve around paying farmers a higher price (= the Living Income Reference Price). They also focus on the long-term, committing to working with farmers at least 5 years and investing in their productivity. Because we know the solution lies in combining all 5 of our 5 Sourcing Principles.”

  • Registration for our World Confectionery Conference is continuing, focused on sustainability and innovation within the sector and celebrating 90 years of Confectionery Production magazine. Tony’s Chocolonely will be represented by Joke Aerts, sustainability open chain lead for the business, who will address some of the key challenges and opportunities facing the business as it moves forward amid market challenges. You can register for this year’s event directly at the following link.

 

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