Cocoa's price falls 35% but other ingredients required for chocolate making has risen

Chocolate prices are not likely to get cheaper as the prices of other ingredients like sugar, milk powder and dairy fat have gone up significantly, and some companies had accumulated stock when cocoa was more costly.

Cocoa prices have fallen 35% over the past year in global markets, but that's good news only for chocolate makers, not Indian consumers.

Cocoa prices have tumbled because of bumper crop in West Africa and partly due to the fall in pound after Brexit. Apart from a few major chocolate companies, the others in India depend on imports from West Africa or South East Asia for their requirements "Prices of almost all ingredients like sugar, milk powder and fats used as cocoa butter substitutes have increased. Sugar prices are up by 25-30% from last year. As a result, many small manufacturers have restricted production," said John Chavady, national sales manager of Lotus Chocolate Company in Hyderabad.

Another problem is that Indian cocoa prices have not tracked the global trend. While the global cocoa bean is available at around Rs.130kg, chocolate companies paid Rs.205-210kg to Indian cocoa farmers.

M Suresh Bhandary, Managing Director, Central Arecanut and Cocoa Marketing & processing Co-operative (Camco), said, "We are saddled with cocoa beans bought at higher prices since we buy in advance. Hence, we may not be able to immediately pass it on to the consumers. But if the downtrend in prices persists, we will be forced to do as we are competing with imported cocoa."

Companies like DP Cocoa Products has been importing chocolates from West Africa by paying duty .

Durga Prasad, Managing Partner of the company said, "By paying 35% duty, it is almost same as the Indian price. So, if government does not reduce duty then we may have to go for cheaper cocoa powder and butter from Indonesia."