Apart from their own supply and demand fluctuations, food commodities prices have also been helped by the recovery in the oil price. Compared with 2012, the cost of milk chocolate is a third higher, although it is 10 percent lower than in 2014, when all the ingredients were at high levels.
But the key chocolate ingredient prices have been driven by the weather. Drier than normal weather due to the El Niño phenomenon has been partly behind the rally in cocoa prices, while sugar prices seem to have bottomed out last August after four-year decline.
Analysts at Rabobank are forecasting further volatility in both cocoa and sugar due to the weather and foreign exchange fluctuations. "There is a strong possibility" of a further sugar supply shortfall, said the bank.
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The hotter than normal weather is proving to be a double whammy for chocolate makers, not only by increasing costs, but by hurting demand.
A hot summer in 2015 followed by an extremely mild start to winter decreased chocolate consumption, said Swiss chocolate maker Lindt earlier this month, although the company managed to expand its market share.
In the three months to November, sales volume for the global chocolate confectionery market fell almost 4 percent, according to Barry Callebaut, the Swiss chocolate company.