Home » How the spiking price of cocoa is sending waves through Australia’s chocolate industry

How the spiking price of cocoa is sending waves through Australia’s chocolate industry

In the early days, the chocolates made by Drew Maddison and his wife Karin were crafted at home and sold in farmers’ markets across Melbourne.

Over time, they built up their business and opened a small factory, hiring staff and increasing their sales.

But as the cost of cocoa has skyrocketed globally, the Maddisons have had to let go of workers as their profits have plunged.

Drew Maddison has run The Ministry of Chocolate with his wife Karin for 25 years. ()

“A lot of the businesses out there are just struggling,” Drew said.

“They’re looking at closing up or selling off.

“It really leaves you wondering, where is our future?”

The rising price of cocoa coupled with the cost of transport and manufacturing have left the Maddisons doing everything they can to keep their business going.

Why is cocoa suddenly so expensive?

The price of cocoa has been on something of a rollercoaster this year, due to extreme weather conditions in West Africa, where some of the largest global growers are based.

Between January and April, the stock price of cocoa per tonne nearly tripled. Since late April, it’s dropped back by about a third.

University of Sydney plant pathology expert David Guest said the latest dip in prices was a “liquidity issue,” and he did not expect them to fall significantly. 

“The main reason behind that is not because of any significant change in the outlook, but simply because the price of cocoa beans has reduced demand from chocolate producers,” he said. 

“While spot prices have come down, the futures market is still fairly high and what that indicates is that cocoa traders are not expecting any rapid solution to the supply problems.”

Australian chocolate maker and producer Chris Jahnke said for the most part, consumers were being spared the price rise, as most manufacturers were absorbing the losses.

He said larger manufacturers were able to avoid the worst of the surging cocoa prices.

“They don’t just buy cocoa today and use it tomorrow,” he said.

“The very large players would have stocks of cocoa, that they that would’ve purchased six months, 12 months ago.

“Smaller manufacturers … tend not to do that. So, they are certainly more affected than the bigger players.”

A man in a large broad-brimmed hat and blue shirt looks seriously at the camera.
Chris Jahnke says high global cocoa prices could make the domestic market more financially viable. ()

Mr Jahnke said small and medium chocolatiers often made more boutique products with a higher cocoa content, which made it financially “a kind of a double whammy”. 

Drew said he would not consider reducing his cocoa content, as he did not want to risk compromising on taste.

“We’re kind of stuck between a rock and a hard place when it comes to pricing versus the quality of product that we really want to create,” he said.

Given the global volatility of the cocoa market, some have been turning their focus to Australian growers.

Could Australian farmers lower chocolate costs?

Laurence Marmara has been growing cocoa for over a decade, after branching out from sugarcane farming in Far North Queensland.

East Trinity Cocoa is Australia’s largest cocoa plantation, with tens of thousands of trees in the rainforests near Cairns. 

“There’s no two ways about it,” Mr Marmara said.

“This is a very good region for growing cocoa.”

A large green cocoa processing factory with is shown from an aerial perspective and is surrounded by rainforest..
East Trinity Cocoa has a $1 million cocoa processing plant at the farm. ()

It’s not without its challenges — pests and cadmium-potent volcanic soil can cause cocoa cultivators strife — but the pure air and water quality of the region has helped bring Mr Marmara success.

He thinks expanding cocoa production domestically could benefit more growers, chocolate makers and consumers.

For farmers, Mr Marmara said cocoa was more robust than the traditionally widespread sugarcane.

“[Cocoa] trees will last for 100 years … with the cane, we’re planting that cane every four years,” he said.

“When it comes to the state of the economy, the state of inflation, it made a lot of sense for me to grow cocoa simply because of its longevity.”

A tanned man stands in front of a cocoa tree in Cairns with his arms crossed. Brown cocoa pods hang from the tree.
Laurence Marmara started growing cocoa in 2012. ()

Mr Marmara doesn’t think a surge in Australian growers will influence the prices of chocolate from the world’s biggest companies, but for local chocolatiers like Drew Maddison, he thinks they could make a difference.

“There’s an opportunity for the cocoa growers here in Australia, in North Queensland, to get their backsides moving and fill in a gap [in the market],” he said.

“While we’ve got these conditions, we can expand, we can make an impact on your chocolate bars now.

“I’m hoping that the industry can take off.”

However, Mr Marmara warned consumers that a sudden uptake of domestic cocoa farming seemed unlikely and global supply problems would probably persist.

“All you chocolate lovers out there, don’t think that the price of cocoa, or your chocolate bars are going to go down in a hurry because I can’t see an end to this,” he said.

Two rows of leafy green cocoa trees are being tended to by a tan middle aged man and his dog.
Mr Marmara says East Trinity Cocoa is the largest cocoa plantation in Australia. ()

Mr Marmara says East Trinity Cocoa is the largest cocoa plantation in Australia. (ABC News: Brendan Mounter)

A farmer wearing a short sleeved khaki shirt is tending to a green cocoa pod on the branch of a tree.
Mr Marmara looks after thousands of cocoa trees on the plantation. ()

Mr Marmara looks after thousands of cocoa trees on the plantation. (ABC News: Brendan Mounter)

A man wearing a hairnet is holding a large tub white tub with a blue lid. Inside are cocoa beans.
Mr Mamara stores the cocoa beans in large tubs for processing. ()

Mr Mamara stores the cocoa beans in large tubs for processing. (ABC News: Brendan Mounter)

A tanned man wearing khaki shirt and a hairnet weighs a scoopful of cocoa beans in a silver scale.
Laurence weighs the cocoa beans in his processing factory. ()

Laurence weighs the cocoa beans in his processing factory. (ABC News: Brendan Mounter)

Mr Jahnke said although the current domestic cocoa industry was small, Australian cocoa was becoming more financially attractive.

He hopes high international prices will entice more farmers into the industry.

“Once we can get a greater volume of growers, we have more critical mass and that can drive some prices down,” he said.

“In a strange and roundabout way, [the high global price] is actually good news for Australian cocoa growers.

“We’re certainly hoping that there’ll be some other larger growers here in Australia to take advantage of this potential opportunity.”

Drew Maddison said an expanded cocoa farming industry would be “fantastic.”

“Unfortunately, there’s just not enough grown,” he said.

An automated manufacturing line contains rows of chocolate frogs in plastic molds before they are cooled to harden.
The Ministry of Chocolate is struggling to keep up with the increasing cost of cocoa. ()

Mr Maddison said high labour costs and the niche expert knowledge required to grow the trees would make it difficult for farmers to compete on the world stage.

Despite the challenges, he remains optimistic about the future for his family business.

“We feel resilient,” Drew said.

“We’ve had to come through quite a lot, so, we are very lucky as a husband-and-wife team.”