Cocoa woe pushes chocolate egg prices up

Global analysts are warning that the price of cocoa is under intense upward pressure globally, with a potent cocktail of climate change, plant disease and poor agricultural practices creating issues with supply.

David Guest, a professor at the University of Sydney specialising in the cocoa plant, said there had been a massive run up in prices in recent years.

"Cocoa production worldwide is unsustainable," Prof Guest said.

"The average price over the past few years has been about $US2500 a tonne ($A3850/t), today it is about $US8500/t ($A13,000)".

He said one of the major issues within the industry was the unequal distribution of wealth.

"The global chocolate industry is valued at $US128 billion ($A195.7b) a year, but the overwhelming majority of cocoa farmers live on less than $US2 ($A3.06) a day.

He cautioned that if there was not better support for farmers there could be a long-term exodus out of the industry.

He said the current environment, with high cocoa prices, was the perfect time to try and implement systemic change.

"The current high prices offer a rare opportunity to raise farmer incomes and support investment in more sustainable farming practices."

"If this doesn't happen, farmers will abandon cocoa and turn to other more profitable crops."

"This would lead to a global shortage of beans and ongoing high prices, making chocolate a luxury unaffordable for many consumers."

Rabobank data backed up Prof Guest.

The rural lender found Australian retail chocolate prices overall were up 8.8 per cent on the previous year.

RaboResearch associate analyst Pia Piggott said the cocoa crisis had been building for nearly a year.

Ms Piggott said a range of issues in the cocoa producing heartland of West Africa, where 60 per cent of the world's cocoa beans are grown, has been a major driver of the problems.

"There is no single 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.

Increasingly stringent environmental controls are also playing a role.

"Increasing sustainability regulations and requirements - including in import markets - which are also limiting supply growth, these include European Union deforestation regulations, which limit area expansion and increase traceability requirements."

Ms Piggott said retail prices for chocolate have risen over the past two years, broadly in line with the overall rise in food price inflation.

"However, while price inflation has now receded in many food categories, we are continuing to see it remain high for chocolate," she said.

She said said many chocolate products had either experienced price rises or 'shrinkflation' - where prices remained stable, but the size of products decreased.