How Ebola Outbreak Could Affect the Price of Chocolate
Thomas Lee /
You soon could be paying more when you buy a candy bar.
Recently, there was a temporary spike in the price of cocoa, the key ingredient in chocolate, likely due to fears connected to the Ebola outbreak in West Africa.
According to the International Cocoa Organization, an intergovernmental commodity organization, the majority of the world’s cocoa, about 70 percent, is harvested in West Africa. Côte d’Ivoire is the world’s top cocoa supplier at almost 40 percent.
Côte d’Ivoire has placed travel restrictions on individuals from Ebola-affected Guinea and Liberia, in an attempt to stop Ebola from spreading. In addition, Liberia has closed its land borders (except for major entry points that have preventive and testing centers), making it difficult for workers to move to other countries. This has caused a major dent in the migrant workforce needed to pick the cacao beans for the harvest season.
ICCO states that current international cocoa prices have taken Ebola into account and, absent a major negative development, the group does not expect significant disruption to the market in the medium term.
However, whether Ebola spreads to the biggest cocoa producing countries could play a role in prices. For example, according to Matthew Bradbard, vice president of managed futures and alternatives at Chicago-based RCM Asset Management, if there is a confirmed case of Ebola in either Côte d’Ivoire or Ghana, prices could rise by 10 percent.
Chocolate companies are likely to pass on any additional costs to consumers, although they may find alternative ways to reduce production costs. One of these ways is to reduce packaging and portion sizes. Another way is to alter the candy bars with less expensive ingredients such as sugar and raisins to balance out the higher cost of cocoa.
Ebola will probably not impact Halloween candy prices. However, as Jack Scoville, a vice president of the Price Futures Group, explains “If [Ebola] does become an issue—which is becoming an increasingly big ‘if’—it would be more of an issue around Valentine’s Day or Easter.”