A huge in­crease in the glob­al price of co­coa is like­ly to re­sult in an in­crease in the cost of choco­lates on the lo­cal and re­gion­al mar­kets of be­tween 25 and 40 per cent, T&T’s largest man­u­fac­tur­er of choco­lates told Sun­day Busi­ness last week.

The Fi­nan­cial Times re­port­ed last week that New York co­coa fu­tures blast­ed through pre­vi­ous highs to hit a record US$12,191 a tonne, up from less than US$3,000 a tonne a year ago.

And last month, the busi­ness news net­work, CN­BC, re­port­ed, “Co­coa fu­tures for May de­liv­ery surged to an all-time in­tra-day high of US$10,080 per tonne be­fore end­ing the day down 0.3 per cent to set­tle at US$9,622. Co­coa has more than tripled in cost over the past year and is up 129 per cent in 2024.”

That re­port was pub­lished on March 26.
As­so­ciate Brands In­dus­tries Ltd (ABIL), which pro­duces the pop­u­lar Charles Choco­lates sold through­out the re­gion, said it has al­ready felt the im­pact of price in­creas­es in co­coa, one of the main in­gre­di­ents in its choco­lates, and is ex­pect­ing fur­ther im­pacts.

While the com­pa­ny man­u­fac­tures choco­late from co­coa prod­ucts in its state-of-the-art fac­to­ry, ABIL group CEO, Nicholas Lok Jack, said the com­pa­ny im­ports co­coa in ad­di­tion to pur­chas­ing from the com­mod­i­ty from lo­cal farm­ers.
He said the com­pa­ny does not use bro­kers to buy co­coa.
“We have our own sources and long term re­la­tion­ships that span over 25 years with some of the biggest play­ers in the co­coa mar­ket as well as small­er more bou­tique sup­pli­ers,” said Lok Jack, “Our source of co­coa is fine-flavoured co­coa from Colom­bia, Pe­ru or Ecuador. We al­so have off-take com­mit­ments month­ly with lo­cal (Trinidad) sup­pli­ers in sup­port of the lo­cal co­coa in­dus­try.”

Lok Jack said the com­pa­ny has var­i­ous con­tracts, but most­ly one to two-year con­tracts on co­coa prod­uct sup­plies. How­ev­er, he ex­plained that, de­spite spe­cif­ic agree­ments al­ready in place to hedge pric­ing, based on the co­coa fu­tures es­ti­mat­ed, there would like­ly be in­creas­es soon.

Asked when he ex­pect­ed ABIL to be im­pact­ed by the price in­creas­es in co­coa, Lok Jack said, “We have al­ready been im­pact­ed and will be fur­ther im­pact­ed with­in the near fu­ture.”

Ques­tioned on whether ABIL has mod­elled the po­ten­tial im­pact of high­er co­coa prices on the cost of its choco­late prod­ucts, the ex­ec­u­tive said: “We are con­stant­ly mod­el­ling all our in­put costs and the im­pact it has on our cost of man­u­fac­tured prod­uct.

In this re­spect, we have been con­stant­ly mod­el­ling the co­coa price giv­en the cur­rent volatil­i­ty and sharp run up in the prices of co­coa. Giv­en this mod­el­ling, we must then bal­ance the cost in­crease with the long-term in­ter­ests of our trade part­ners, share­hold­ers and con­sumers.”

He said the ex­pect­ed in­creas­es can range from 25 per cent to 40 per cent de­pend­ing on the prod­uct.

The Mon­tanos Choco­late com­pa­ny, which is run by Mar­cus Mon­tano, told Sun­day Busi­ness that there had been an at­tempt to sell co­coa to the com­pa­ny at an in­flat­ed price.

Mon­tano’s wife Ele­sha Mon­tano said she felt the at­tempts to sell co­coa at a high­er price could be prob­lem­at­ic and the com­pa­ny was care­ful not to en­cour­age the in­flat­ed prices to be­come stan­dard.

She said the sell­er at­tempt­ed to of­fer beans at a 75 per cent mark up.
“Peo­ple con­tact­ed us, peo­ple we have nev­er bought from, of­fer­ing beans to us be­cause they heard we were buy­ing. Their price was above what we were ac­cus­tomed pay­ing and we re­fused. We said no, we’re okay. Thanks for the of­fer but we are good,” said Ele­sha.

“We be­lieve if we en­cour­age the spike it will not go back to the nor­mal rates.”
She ex­plained the com­pa­ny al­ready had arrange­ments in place to keep its sup­ply un­af­fect­ed and did not have to buy at a high­er rate.

“We have not been af­fect­ed by the cost or the spike in co­coa prices be­cause we buy from La Re­union, which is a state-owned agency. They have not raised their price,” said Ele­sha, who ex­plained the fam­i­ly busi­ness al­so took pre­cau­tions as a re­sult of the COVID-19 pan­dem­ic and the pre­vi­ous co­coa short­age.

“There’s no change for us. What had hap­pened with us for COVID when we saw it the weath­er had changed. Al­though we were told by the agen­cies that co­coa would nev­er be in short­age in Trinidad, we had stock­piled a bit. So even when there was a short­age in 2023, we were not af­fect­ed,” said Ele­sha. “Our prod­uct nev­er was with­out sup­ply. We were nev­er lack­ing and we al­ways had prod­ucts to sell and to do our spe­cial projects. We do prod­ucts for Caribbean Air­lines, they are a spe­cial or­der. We al­ways have prod­ucts.”

She al­so ex­plained that sell­ing beans at an in­flat­ed price could al­so back­fire for farm­ers giv­en the short shelf life of the prod­uct.

Eliz­a­beth Mon­tano, the moth­er of Mar­cus and Machel Mon­tano, al­so con­firmed that the com­pa­ny was in the process of ob­tain­ing an es­tate to fur­ther con­sol­i­date its pro­duc­tion line.

Yvette Gar­cia of Lopinot-based busi­ness Dulce Co­coa Pa­ny­ol En­ter­prise said she was large­ly in­su­lat­ed from the price in­creas­es due to her per­son­al ac­cess to co­coa trees.

“I have like about six to eight trees that I will use for what­ev­er co­coa balls that I am do­ing be­cause I con­cen­trate on the co­coa balls for drink­ing. And then I have a side prod­uct I use to make soaps and scrubs,” she said, adding that on the odd oc­ca­sion if she is short of co­coa for her prod­ucts she can read­i­ly look to her neigh­bours.

“I don’t even know what is the price they sell­ing at but I do know that what­ev­er it’s sell­ing at, the mar­ket hasn’t re­al­ly ben­e­fit­ed that much,” said Gar­cia, who felt that more peo­ple need­ed to en­ter the in­dus­try for there to be any great cap­i­tal­i­sa­tion on in­ter­na­tion­al price in­creas­es.
She ex­plained that there are un­der­used co­coa es­tates which, if paired with the right in­vestors, could see the in­dus­try take off.

“I think there are a few aban­doned es­tates and if the gov­ern­ment can make it avail­able to peo­ple who are will­ing to in­vest, that would be great. Own­ing a co­coa es­tate is some­thing you have to love to con­tin­ue in it, be­cause of the amount of work you have to put in­to it get­ting the beans ready. You can nev­er re­al­ly say it is prof­itable un­less you do the oth­er prod­ucts from it, “ said Gar­cia.

The in­crease in the price of co­coa prompt­ed for­mer Agri­cul­ture Min­is­ter De­vant Ma­haraj this month to urge the lo­cal au­thor­i­ties to en­sure T&T would ben­e­fit from the co­coa boom.

In a state­ment, Ma­haraj said, “With co­coa fu­tures hit­ting record highs, T&T’s co­coa farm­ers stand to po­ten­tial­ly ben­e­fit sig­nif­i­cant­ly, mark­ing a turn­ing point for the coun­try’s co­coa sec­tor.  High­er co­coa prices can dri­ve in­creased prof­itabil­i­ty for co­coa farm­ers. The lo­cal co­coa in­dus­try, known for its fine or flavour co­coa beans, should be prepar­ing to cap­i­talise on this op­por­tu­ni­ty.”

How­ev­er, some stake­hold­ers are cur­rent­ly see­ing mixed for­tunes as a re­sult of the price in­creas­es.

Agri­cul­tur­al con­sul­tant, Riyadh Mo­hammed con­firmed the high­er co­coa prices would have some im­pact on the lo­cal sec­tor, as he point­ed to the ex­pe­ri­ence of co­coa farm­ers and busi­ness­es es­tab­lished in Lopinot.

Small­er com­pa­nies at­tached to the in­dus­try have said they have seen no re­al change in busi­ness.
CEO of the Lopinot Tourism As­so­ci­a­tion Don­na Mo­ra said the price in­crease had so far neg­a­tive­ly im­pact­ed the Lopinot Choco­late Com­pa­ny as se­cur­ing co­coa beans had be­come more ex­pen­sive.

“It’s very hard, be­cause when we used to pay $35 a kilo­gramme, we now have to pay $50 a kilo­gramme. And right now no­body let­ting the price down or giv­ing a dis­count. This is the price we get­ting it for now,’ Mo­ra told Sun­day Busi­ness in a phone in­ter­view.

“Our choco­late price has re­mained the same for the last ten years which is $20. So you can imag­ine how it is hurt­ing our pock­et,” said Mo­ra, who said this came on the heels of a short­age of sup­ply in 2022 in­to ear­ly 2023, which al­so cre­at­ed chal­lenges.

“We have a nice thing go­ing. We have some­thing nice and a sus­tain­able de­vel­op­ment with sus­tain­able liv­ing but the cost of the co­coa now has af­fect­ed us tremen­dous­ly. We are try­ing to keep the costs the same be­cause we want our cus­tomers, main­ly tourists, who buy our choco­late, to con­tin­ue buy­ing,” said Mo­ra.

She, how­ev­er, not­ed price in­creas­es had not soared as high as those seen in­ter­na­tion­al­ly, but she did wor­ry about the pos­si­bil­i­ty that cli­mate change would af­fect sup­ply again.