MW Here's how much more you'll pay Valentine's Day chocolates this year

By Myra P. Saefong

Cocoa, the basic ingredient for chocolate, nearly tripled in price last year. Here's why.

If you're about to head to the store to buy chocolates for your valentine, be prepared to shell out more than you did last year as candy makers continue to deal with the high cost of cocoa.

A recent survey conducted by the National Confectioners Association shows that 91% of Americans will mark Valentine's day with chocolate and candy, and nearly half of Americans in the survey said they will buy a box of chocolates just for themselves.

But prices for cocoa (CC00), the basic ingredient for chocolate, nearly tripled last year, with prices for the commodity on the ICE Futures U.S. exchange up 178% in 2024. That marked their third straight year of gains. The most-active cocoa futures contract (CCK25) reached a record intraday high of $12,931 per metric ton on Dec. 18.

They've eased back a bit to $10,538 as of Thursday, down nearly 19% from that record high and down almost 11% so far this year, according to Dow Jones Market Data. But that's of little consequence for companies that make chocolate treats.

"We've dealt with price fluctuations before, but nothing on this scale," said Neil Cox, chief executive officer of Diana's, 30-year-old brand known for its chocolate-covered frozen bananas. He said cocoa prices have surged by three to four times compared to last year, "making this the most volatile period we've ever experienced."

Though Diana's anticipated some of this and took steps to prepare, "when costs rise this drastically, it presents a major challenge - especially for a small brand," said Cox. "Unlike larger chocolate companies, we don't have the same flexibility to absorb cost increases across a broad product portfolio or hedge chocolate out 12-18 months in advance."

An executive at confectionery giant The Hershey Co. $(HSY)$ mentioned the impact of hedging, defined as the use of financial instruments to help reduce the risk of adverse price movements in an asset or commodity, on its business when it released earnings in early February.

When asked about top and bottom line growth for 2026, Steven Voskuil, chief financial officer and senior vice president, said that as the company looks ahead to that year, "one of the benefits of a great hedging and commodity team is we're not paying the market price, so you always have the catch-up factor relative to commodity." That implies the company will eventually pay higher prices to buy the cocoa it needs.

But "just like for 2025, when we look at 2026, we expect to use the full suite of levers we have to manage cocoa price. And that includes looking at pricing," said Voskuil.

Hershey didn't immediately respond when MarketWatch sent a request for comment on chocolate pricing.

Cocoa prices skyrocketed in 2024 due to adverse weather in Côte d'Ivoire, the world's largest cocoa producing country, said Darin Newsom, senior market analyst at Barchart. At the same time, "demand stayed strong through the 2024 holiday season."

Read: Cocoa is the best-performing commodity of 2024 - even beating bitcoin. What's next?

Global cocoa production is estimated to have declined by 14% in the 2023-2024 season, according to the World Bank, falling to 4.2 million metric tons from 4.9 metric tons in 2022-2023 season.

John Caruso, senior market strategist at RJO Futures, said there's been a "perfect storm for cocoa prices," with a combination of erratic weather and drought spells followed by periods of persistent rainfall that puts stress on crops and causes disease.

That's culminated into a recent rise in retail prices as much as 20%, according to some reports, said Caruso, though that amount can vary depending on the manufacturer.

At Diana's, commodity fluctuations are built into its business planning, said Cox, but this level of increase in cocoa prices "goes far beyond what we anticipate."

As a result, "we've had to implement double-digit price increases," which is far above our usual adjustments of 3% to 5% per year, he said. The adjustments to retail prices were "necessary to offset the sustained rise in cocoa costs."

-Myra P. Saefong

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February 13, 2025 17:09 ET (22:09 GMT)

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