The double whammy, demand increases and supply decreases:
This year, perhaps more than ever, kisses may not come cheap.
At least not those made of chocolate on Valentine’s Day.
The price of cocoa, the main ingredient in most chocolate, soared last year, forcing chocolate producers to raise prices and shrink packages.
A growing appetite for chocolate, particularly dark chocolate, which requires more cocoa, in China and other Asian markets is the primary cause, commodity analysts say. ...
Another factor is the harmattan, a dry, dusty wind that began sweeping the major cocoa producing countries in West Africa in December, the beginning of the prime cocoa harvesting season. The harmattan has been worse than usual this year.
Cocoa trees also suffered attacks by witches’ broom and frosty pod, fungi that can cause steep losses.
The average dollar price for a ton of cocoa was $2,921.05 last month, according to the International Cocoa Organization. That was slightly higher than the price a year earlier — but less than the peak average price of $3,270.27 in August ....
“L&S, like other companies in the chocolate industry, had to make occasional price adjustments on selected products in 2014 to absorb some of the raw material cost challenges — even if at first we always try to counter these challenges with increases in efficiency and volume,” Sylvia Kälin, head of Lindt & Sprüngli’s corporate communications, wrote in an email. Mars, the maker of M&Ms and Milky Way, also announced plans to raise prices.
Ms. Kälin said consumers so far had not punished the company for raising prices.
Data from Nielsen, a consumer research firm, hints at the price increases. While the amount of chocolate Americans bought last year rose 1.2 percent, to 2.2 billion pounds, the amount they paid for it rose 2.6 percent, to $13.6 billion.
If price rises and expenditures also rise then demand is inelastic. No kidding, I need my glass of Ovaltine every night before bedtime.