If you have a sweet tooth for chocolate, you may want to start stockpiling your favorite goodies. According to a recent NBC news article, raw material costs for a 3.5 ounce chocolate bar have risen 28% this year alone. This is partly due to adverse weather and agricultural regulations in West African countries where cocoa beans are produced, but also because of increases in the price for other ingredients such as milk powder. The theory of supply suggests the changes in these non-price determinants will cause an inward (left) shift in the supply curve, raising the price and possibly creating a shortage of the beloved confection.
Adding more concern to the pending worldwide chocolate crisis is the increase in demand from emerging markets. Forecasts predict a 21% increase in demand for chocolate in India by 2018, and an astonishing 45% increase in Russia by 2016. As the article states, "People are prepared to pay 70 pounds ($113) per kilogram (2.2 pounds) for chocolate." In order for consumers to continue indulging in their favorite sweet, producers may have to increase fillers and use imitation flavoring to contain costs. For those of us who will eat nothing but the best, we may find real chocolate becomes a luxury item, and a scarce one at that.