With cocoa prices up, cost of chocolate bunnies may jump

MILWAUKEE – As luck would have it, the melting point of chocolate is not far below the human body temperature of 98.6 degrees — making it perfect for melting lusciously in your mouth.

If that thought has you salivating, and especially if chocolate bunnies are the centerpiece of your Easter basket, you might want to hop over to your favorite candy seller sooner rather than later, because the price of cocoa is on the rise.

Cocoa bean prices jumped to a two-month high earlier this month and have climbed since as dry weather threatened to shrink the crop in Ghana and Ivory Coast, the African nations that produce 60 percent of the world's cocoa, said Alex Breitinger with Breitinger & Sons, a commodity futures broker in Valparaiso, Ind.

Also, Breitinger said, sugar prices hit a three-month high on worries about El Niño weather resulting in the smallest sugarcane crop since 2012.

As of last week, cocoa beans were selling for $3,113 a metric ton on the futures market, up about 10 percent over the past couple of months.

"Prices for chocolate bunnies could be rising. The cocoa and sugar markets have been rallying sharply, adding to the cost of making chocolate," Breitinger said.

Fortunately for consumers, though, a spot check of confectioners found that many tend to buy their raw materials in bulk well ahead of their busiest seasons — Christmas and Easter — so the recent spikes in cocoa and sugar prices aren't likely to be a big factor for this holiday's retail chocolate prices.

He said consumers might see an increase of 5 or 10 cents for some chocolate rabbits this year compared with a year ago.

"It didn't go up drastically because the last time we signed a contract, chocolate hadn't gone up that much from the previous contract," he said. "It's more important what the price is when we get to the end of the contract and what the forecast is going forward for us."

At Niemann's Candies Inc. in suburban Milwaukee, chocolate rabbit prices are the same this year as last year, said Jim Niemann, company president, although he's well aware of the direction of prices of chocolate ingredients.

"When we go into next year, that could be another story," Niemann said. "If this trend continues and we're still getting this upward pressure, that's when the prices have to be adjusted."

And, that upward pressure could well be a continuing trend. In 2015, the International Cocoa Organization said the weather in West Africa had been the driest in 35 years. Cocoa plants require lots of water and humidity or their bean production falls.

"There's been a lot going on with cocoa in the past few years," Breitinger said.

As production has slipped, demand for cocoa has risen in China and other new chocolate markets that have seen double-digit sales increases.

"Chocolate is one of the most popular food products among all age groups of people. The rise in demand for dark chocolate is a promising trend emerging in the market. Many research studies indicate that dark chocolate can improve cognitive function and blood flow. Also, dark chocolate is rich in soluble fiber, iron, magnesium, copper, potassium and phosphorous," according to the Global Chocolate Market 2015-2019 report from the firm Research and Markets, based in Ireland.

At least one Milwaukee chocolate business says that poor planning on the part of a large supplier has resulted in a lot of angst for some candy makers as they approach Easter.

"It's a real mess, and it's happened to people all over the United States. I have been on hold waiting and waiting and waiting, and finally I am getting a load in Tuesday," said Jim Fetzer, owner of Northern Chocolate in Milwaukee.

"We are lucky that it hasn't affected us. As a small company, when it costs you more to make something, you have to pass that cost along to the customer," said production manager Aaron Nikodem.