Chocolate prices witness an upward trend amid supply constraints and Trump’s trade policies

Chocolate prices have risen sharply in recent months and continue to climb, primarily due to a severe global cocoa shortage and newly imposed tariffs on imports. The situation has been worsened by recent trade policies under Donald Trump, with broad-based tariffs signaling continued inflationary pressure on chocolate-related goods.

The primary cause is a supply crisis in West Africa, which accounts for about 70% of global cocoa production. Harsh weather conditions, extended droughts, and crop diseases have devastated cocoa yields. This has created a supply shortfall of more than 400,000 tons, driving cocoa prices to unprecedented levels—jumping from a long-standing average of around $2,000 per ton to over $12,000 per ton in 2024.

The pressure from raw material shortages has been compounded by a new round of tariffs on imports. Since large-scale cocoa cultivation isn't feasible in the mainland United States, domestic chocolate manufacturers rely almost entirely on imported cocoa beans. With limited production in Hawaii and Puerto Rico, these tariffs affect the entire industry uniformly, leaving no room for domestic substitution.

In addition to cocoa, packaging materials (especially paper sourced from countries like China) are also impacted by tariffs, pushing up operational costs even further. Rising shipping costs due to port congestion and logistics disruptions add another layer of financial strain, particularly for smaller producers with less flexibility.

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With no short-term resolution to the cocoa supply deficit and trade policies inflating import-related expenses, chocolate prices are expected to stay elevated. Smaller chocolate makers are especially vulnerable in this environment, facing margin compression and uncertain consumer response to price hikes. Several have already exited the market in recent years, highlighting the fragility of small-scale operations in such a volatile pricing landscape. The industry as a whole is bracing for continued instability.