What’s the real story on chocolate prices?
Vox has a fun, made to-be-shared explainer of 7 charts that explain Halloween. But one charts stands out as not quite right:
This chart, produced by the US sugar lobby, presents a world of rising chocolate prices unmoored from the relatively steady cost of sugar. Vox explains that the price of a plain Hershey bar has risen, “even though the price of sugar has remained almost the same.”
But the industry’s chart cherry picks odd years with no clearly explained interval. What’s behind these data points? The most likely answer is that American Sugar aims to present a narrative of relatively flat sugar costs to counter the confectionary industry’s complaints that US sugar subsidies are distorting markets and driving up US sugar prices.
Indeed a more comprehensive look at global sugar prices shows a very different trend line:
1. The real price of sugar
2. The cost of US sugar subsidies
The sugar industry chart also won’t show you how US and World Sugar prices have differed over time. This chart from the Mercatus Center shows how protectionist US subsidies have propped up the US sugar industry, artificially inflating prices for American consumers even as farmers in developing countries are disadvantaged.
3. The cost of cocoa
While Vox explains that the price of a plain Hershey bar has risen “even though the price of sugar has remained almost the same,” the chart and explanation leaves out the price of cocoa, which is after all, a key ingredient in chocolate.
4. Who is profiting from the rising price of chocolate?
Whether or not chocolate price increase can be explained by the rising sugar/cocoa prices, another important question is: who benefits? In spite of rising cocoa prices, so far poor cocoa farmers aren’t seeing many of the gains.
Most cocoa farmers work very small plots of land in West Africa and live in poverty. Many live on less than $2 per day, and women cocoa farmers often earn less for their work than their male counterparts even though they handle key aspects of production. The average cocoa farmer only gets about 3 cents of every dollar spent on chocolate:
5. Shrinking workforce
A central challenge facing the cocoa industry is the shrinking and aging workforce. Many farmers are moving to cities or choosing other crops simply because they can’t earn a living growing cocoa. A cocoa farmer in Cote d’Ivoire for example earns about $342 a year for their efforts. The poverty line in that country is $5840, 1608 percent more than the farmer makes annually. That’s huge gap.