Why there are shockingly high prices for chocolates this Halloween: NPR

As cocoa prices continue to rise, shoppers are seeing horror prices for chocolate candy at the supermarket this Halloween season.

A series of poor harvest seasons has reduced the supply of the key ingredient in chocolate bars and pushed up the price of making chocolate and confectionery from cocoa by 45% from January to September, according to the Producer Price Index.

Chocolate manufacturers pass the high costs on to consumers, discouraging buyers of KitKats and M&Ms.

Dollar sales of chocolate candy rose 1.5% last year, driven by inflation and rising shelf prices, according to a National Confectioners Association report this month. But given how expensive chocolate is, people are cutting back on purchases of M&Ms and Hershey's bars: the number of chocolate units sold fell by almost 5% over the same period.

Why the high chocolate prices?

The cost of cocoa hit a 47-year record high in February but has been rising for more than a year.

The high cocoa prices are due to volatile weather conditions in the world's major cocoa-growing regions, particularly Ivory Coast and Ghana.

A heavy rainy season in West Africa last year led to disease affecting crops. Warm, dry temperatures and El Niño winds affected this year's harvest.

According to a recent report from the Wells Fargo Agri-Food Institute, next year will mark the third consecutive year of cocoa harvest failures.

As a possible future-proofing measure, farmers have increased the planting of cocoa trees in the African region and in South American countries where orchards have been more productive. However, the production of cocoa trees takes at least a few years.

Chocolate makers are expanding their palates

Chocolate makers will likely be feeling the pain for some time, which means chocolate candy prices will also remain high for a while.

“As we approach Christmas, things are looking pretty bad for chocolate makers in terms of cocoa prices,” said Billy Roberts, senior food and beverage economist at CoBank's Knowledge Exchange research division.

Unless there is a dramatic turnaround in the chocolate market, it will be difficult to turn things around in time for Valentine's Day, he said.

Dan Sadler, head of customer insights at Circana, told Reuters that consumers are saving money when buying expensive chocolate.

“When it comes to chocolate candy, there just aren’t as many items on the shelf per retailer,” he said. “We are seeing double-digit growth in non-chocolate items.”

After months of disappointing chocolate sales, chocolate makers have begun diversifying their offerings and expanding their selection of sweeter, gummy and sour treats.

Pennsylvania-based Hershey, for example, recently introduced Jolly Rancher Ropes and Shaq-a-Licious gummies inspired by the retired basketball star, and plans to launch more non-chocolate candies in the coming months.