Just like other holidays, Valentine’s Day is a time of gifting our loved ones. However, if you haven’t been buying chocolates, gold pendant or inviting someone for a coffee recently, you might be surprised by the price of these products and services. The price of raw materials needed to prepare these presents are hitting historical highs, making it clear that this year’s Valentine’s will not only be more expensive than a year ago, but also the most expensive in history.
Cocoa Twice as Expensive as in 2024
Last year, we frequently read about the extremely high cocoa prices, which could affect the price of chocolate. Producers like Hershey, Mondelez, Mars and Ferrero have long been using stored cocoa, reducing the size of the chocolate bars or reducing the percentage of cocoa in finished products to avoid raising prices. However, the availability situation of the cocoa beans is now dire. Stocks have fallen to their lowest level in about 30 years, and Ivory Coast and Ghana have slightly increased their production forecasts for the current season. Diseases of trees, weather conditions and regulations make the cocoa prices go up. Prices not only exceeded the level of $10,000 per ton, but even broke above the level of $12,000 per ton at some point, which is double the price compared to the Valentine’s of 2024. This, of course, doesn’t necessarily mean a double chocolate bar price compared to last year’s levels. The proportion of cocoa in products is decreasing, the price relies on other raw materials like powdered milk or sugar, and on top of it service costs. Nevertheless, not only is the chocolate more expensive at the moment, but its price is likely to raise as manufacturers have no choice but to pass on the costs to the consumer. Will we see any improvement? Climate change, in many respects, is irreversible but on the other hand, high prices could encourage more investment among farmers, not only in Africa but also in South America. This however raises another problem related to deforestation.
Coffee Has Never Been So Expensive
At the end of 2024, headlines screamed that coffee could break historic highs, which were last seen around 50 years earlier. Coffee prices not only broke those levels but reached 400 cents per pound, which is 4 times more than in 2020! Five years ago, coffee was so inexpensive that the cost of production often exceeded its market price, which forced farmers to abandon their plantations, mainly in Central American countries, and switch to corn, soybean, or popular coca production. This led to a situation where with increasing demand, production prospects were significantly limited. Coffee consumption was growing, not only in main markets such as Europe or North America, but also in Asia, which is currently the main driver of global demand.
Besides small gifts such as chocolates or a coffee invitation, one of the most popular presents is jewelry. Obviously, the most popular and expensive is gold, and the demand for this metal is significantly increasing in recent months. Last year, during Valentine’s period, gold cost just above $2000 per ounce. Currently, prices exceed $2900 per ounce, which is an absolute all-time record.
The Most Expensive Valentine’s In History
Of course, during Valentine’s, no one will be looking at prices, but we can clearly state that these will probably be the most expensive Valentine’s in history. We must remember that a significant problem with all considered goods is the fact that despite high prices, larger amounts don’t directly reach farmers or workers dealing with their exploitation. As long as this doesn’t change, there will be no pretext for production to increase in the future, which would normalize prices. Of course, we have to keep in mind that we don’t have to buy a ton of cocoa, a sack of coffee, or a gold bar for our loved ones right away, bearing huge costs. But if we want to express our feelings with certain sweet or gold gifts, this year we will have to dig a little deeper into our pockets.
Author: Michał Stajniak, Deputy Director of XTB Analysis Department
Source: https://managerplus.pl/najdrozsze-walentynki-w-historii-ceny-kawy-kakao-i-zlota-bija-rekordy-27730
