“A 50-60% rise in the price of chocolate is an optimistic scenario.” Oleksandr Baldynyuk, President of Ukrkondprom
2 April 2024 18:22
БЛІЦ
At the end of March 2024, the price of cocoa beans reached a historic high of USD 10 thousand per tonne. Experts say the reason for this is the abnormally hot weather in Côte d’Ivoire, which threatens the cocoa harvest. Prices rose only on expectations – cocoa beans are sold on exchanges under futures contracts. Ukraine has already been affected by the rise, with prices for chocolate bars rising by almost a third since the beginning of the year. How much more will chocolate rise in price, what can we expect from its quality, and what is happening to cocoa beans in general? These questions were answered in a blitz interview with Komersant ukrainskyi 
by Oleksandr Baldynyuk, President of Ukrkondprom, an association of domestic confectioners.
Will chocolate rise in price?
Of course, its price will increase. It is already rising – since the beginning of the year, it has jumped by 20%, possibly more. I do not monitor consumer prices in Ukraine, and statistics are not published in the required volumes, but from what we see on the market, chocolate has been growing every month, at least since the new year. Last year, the price of cocoa beans increased by 50%, this year it has almost doubled, and will continue to grow. In September 2021, the price of cocoa beans was USD 2.5 thousand per tonne, and now it is over USD 9 thousand per tonne.
I don’t know if chocolate will double in price, but objectively, 50-60 per cent is a fairly optimistic scenario.
What factors influence the price of chocolate?
There are certain factors that counteract the price increase, despite even such a shock jump in raw material prices. In particular, the quality of chocolate: there are quite a few powerful chocolate producers in Ukraine, and Ukrainian chocolate is exported. In addition to the fact that our Ukrainian producers compete for the domestic market, our market is also open to imports, there are no trade barriers. And this fierce competition for the consumer that exists in Ukraine between our producers, and is further intensified by imports, slows down prices. Because producers are fighting for every taste, every penny in cost, and so on. And a one-time price increase threatens to lose a market segment.
Will the quality of chocolate deteriorate?
No, the price increase will not affect the quality of chocolate. We have technical regulations for chocolate, and they are in fact fully harmonised with the European directive. It states that the minimum content of cocoa products in chocolate should be 35%. And cocoa butter should be at least 18%. So anything less cannot be called chocolate and will not be. It is clear that no one will replace chocolate with substitutes or equivalents to circumvent these proportions, because this is a violation of the regulation. It is mandatory and cannot be ignored.
The quality of the chocolate will not drop in any way. When cars become more expensive, it doesn’t affect the quality of their assembly, does it? Regardless of the price of cocoa beans, the quality of chocolate will not fall.
What markets do cocoa beans come from in Ukraine? Which ones are the best and most expensive?
It’s not a question of which is better and which is worse. If we are talking about trade, the supply on the market is actually formed mainly by 3 countries in descending order of weight – Côte d’Ivoire, Ghana and Nigeria. These three countries export the most in the world. There is also processing there, and multinational companies have already built processing plants, even state-owned ones. That is, they sell both processed cocoa and cocoa beans. But a lot of beans are processed in the EU, for example. The Netherlands seems to be the largest processor of cocoa beans.
Ukraine buys mostly finished cocoa products: cocoa mass, cocoa butter, cocoa powder. We don’t buy much beans – about two thousand tonnes a year. Last year, we imported 2.7 thousand tonnes of cocoa beans. Before the full-scale war, we bought more. It’s just that we don’t have much processing capacity. Many companies rely on ready-made ingredients in their chocolate production strategies that they buy from leading European countries: cocoa butter, cocoa mass, etc. There are companies that process cocoa beans – they buy them and process them for their own chocolate products.
However, regardless of whether we buy cocoa beans or processed cocoa products, the dynamics of price growth for cocoa products is still tied to the price of cocoa beans.
Is there an artificial substitute for cocoa?
There are cocoa substitutes, and there are cocoa butter equivalents made from certain oils. They are specified in both the European directive and our regulations. They can be added, but if to chocolate, then no more than 5%, and not by replacing cocoa butter, but in addition. That is, not just to replace it, but it must be equivalents, i.e. fats that are identical to cocoa butter in terms of physical and chemical properties. Because cocoa butter substitutes and cocoa butter equivalents are different things, and the latter are not added to products to reduce the cost. They are not cheap.
At the same time, if a manufacturer adds a cocoa butter equivalent, then, according to the regulations, it must indicate this in the list of ingredients, and it must be in a larger font. That he has added other vegetable fats to cocoa butter.
You can replace rye bread with wheat bread, and wheat bread with another kind. It’s not about substitution. The point is that there are regulations that clearly state that anything less than 35% is not chocolate.
