Valentine's Day Special: The Cost of Love (and Cocoa)
Valentine’s Day is an expensive holiday. While some joke that greeting card companies invented the day to juice profit margins, the current cost of a gift is no laughing matter. Gold prices are hovering near record highs (a topic for a future post), but that heart-shaped box of chocolate will cost you roughly 231% more than it did four years ago. What is driving this "Cocoa-nomics" crisis? To understand the price spike, you need to look at West Africa. Côte d’Ivoire and Ghana produce roughly 60% to 70% of the world’s cocoa. Over the last two years, this region was hammered by record-breaking rains that rotted pods on the trees, followed by a brutal El Niño-driven drought. The 2023/2024 season saw production plunge by 25%, leading to the lowest global yields in decades. This was compounded by a massive spike in production costs. Following geopolitical tensions in 2022, fertilizer prices skyrocketed as Russia and Belarus, two top exporters, were largely sidelined. Many ...