No Simple Solutions to the Easter Egg Crisis

As we reach the end of the first quarter, post-COVID supply chains remain in a funk, with hydrocarbon prices elevated with the ongoing war in Ukraine and now Red Sea shipping almost completely halted by the Israeli-Yemeni confrontation. It’s hard to see an end to the persistent supply chain issues and global economic dysfunction.

This international conjuncture is now set to hit Australians where it really hurts: Easter egg prices.

Since the start of the year, analysts say the average chocolate price has increased 8.8% since the beginning of the year. Supermarket chains are, as usual, blaming supply chain issues and baseline commodity prices.

But it seems that when it comes to not just Easter eggs but the medium-term chocolate forecast, the worst is yet to come.

The International Cocoa Organisation says that cacao wholesale prices have risen by 11% over the past 12 months. In fact, from the beginning of 2024 when wholesale cacao cost USD $4.20, the price at the start of April had reached $10. 

The price jump has been a boon to growers in cacao-producing countries.

Climate change is indeed a real factor here. The lesser known Atlantic Niño results in ocean temperature variations that increase rainfall in Brazil and cause droughts in West Africa, and this affects the cacao production heavyweights like Ghana and Ivory Coast.

But Rabobank commodities analyst issued a word of caution about the prospect of simple solutions to this crisis. “There is no single root catalyst for this deficit. It is a combination of a range of agricultural and other factors, including adverse weather conditions, ageing trees and disease in crops,” she said.

A serious subject worthy of serious debate. One can expect a committee to address this matter shall be formed by the Albanese government shortly.

I for one remain long on chocolate, and will continue to hold substantial stock, with cash in reserve for further opportunistic purchases when available. Truly the blue chip stock of commodities, chocolate’s intrinsic quality means it’s a guaranteed buy for me this Easter.

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