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Have we hit peak chocolate?

24 March 2016
Sustainability programs are important for the long-term supply of cocoa beans, our experts said.

In the lead up to Easter, experts from the University of Sydney take a look at the state of the cocoa industry to discuss where chocolate comes from (and if the supply is running out).

During Easter supermarket aisles are consistently stocked up with chocolate eggs of all sizes and varieties yet it is not often that we stop to consider whether this supply of chocolate is in fact endless - or whether this might be under threat. While consumers are unlikely to face any serious problems enjoying their Easter chocolate this year, University of Sydney experts have warned the price of these treats might rise over the coming years.

Dr Jeffrey Neilson from the University's School of Geosciences has conducted research on sustainability programs in the cocoa industry. There are serious concerns over the long-term supply of cocoa beans (which are needed to make Easter eggs), Dr Neilson adds, "there are legitimate supply concerns in the major producing regions of West Africa and Southeast Asia." 

Dr Neilson's concerns are supported by Professor David Guest from the Faculty of Agriculture and Environment. Having focused his research on the management of diseases in perennial tropical crops, including cocoa, Professor Guest says the market is heavily dependent on events in West Africa, with around 70 percent of global production coming from the region. 

Curious case of a chocolate crisis

Sustainable cocoa production in Eastern Indonesia and West Africa is key to ensuring our supply of chocolate continues, said Dr Jeffrey Neilson. "Plant pests and disease, farmer health and work conditions, political instability [in West Africa] and a historical pattern of forest clearing can threaten cocoa farms," he added.

"Some organisations have promoted 'fair trade' cocoa as a solution to these challenges, but this is unlikely to help all communities in all regions. Many chocolate companies are instead developing in-house sustainability programs that work directly with farmers in an attempt to ensure a sustainable supply of cocoa in their factories.

"There are some chocolate manufacturers that have warned of an impending chocolate crisis as cocoa demand outstrips supply. However, history suggests that supply shortages would result in increasing prices and new entrants into cocoa farming worldwide. Since cocoa is a tree crop, that may result in a lag. Overall, while there is unlikely to be an absolute cocoa crisis, there might be a crisis of cheap cocoa."

Having we reached peak chocolate?

Investing in long-term strategies that support cocoa production and ultimately improve the livelihoods or rural communities is the best way forward, said Professor David Guest. A Professor of Plant Pathology, Professor Guest said plant diseases pose a serious threat to global food security.

"The only long-term solution will be higher returns for farmers that attract young people to return to, and invest in, cocoa farming. Otherwise, expect to keep paying more for your Easter eggs," said Professor Guest.

"Prices of cocoa beans firmed over 2015, reflecting uncertainty in global markets. While consumption is down in the US, Russia and Brazil because of their generally poor economics, European consumption remained flat, and there was solid growth in demand in Asia.

"Global production is estimated to fall this year because of El Niño and long-term structural problems in the industry. Cocoa is a labour-intensive crop and in most producer countries, farm-gate prices are not competitive with alternatives such as palm oil or maize. As a result, cocoa trees and farmers are aging and becoming less productive."

Reflecting on the oubreak of Ebola last year, Professor Guest said the virus threatened cocoa production in West Africa but did not impact the main growing areas in Côte d’Ivoire and Ghana.

"Those countries actually had a good crop last season and cocoa prices have declined as a result of this high level of supply. This drop does not seem to have been reflected in the price of chocolate Easter eggs last year, said Professor Guest.