Is Chocolate Sending a Warning this Easter
Channel Seven and Sky News reported this week that Australian food prices have soared above world averages. While it doesn't seem possible for prices to go any higher, we also have reports coming in regarding chocolate. As expensive as chocolate already is, you can expect a further price spike on cocoa in the months to come. The reason should send a shiver down the spine of chocoholics everywhere. And if this doesn't scare you, it is coming for the coffee bean too.
According to the Channel Seven and Sky News reports this week, Australians pay about 54% more for basic food items than global averages. We also have some of the highest housing prices. Is it any wonder most of us are struggling?
Many in the media have pointed to the two major supermarkets as the leading cause. Channel Seven interviewed a Labour MP, Dr Andrew Charlton on the subject. role Coles. He didn't hold back.
"The global executives of these companies call Australia 'Treasure Island.'"
Dr Andrew Charlton MP
Dr Charlton argues that because there is insufficient competition, the two major supermarkets can charge what they like. Unlike a lot of politicians, he is probably worth listening to. This man is not your average MP, he is also an Oxford university fellow in economics and previously worked as a Senior Executive at Coles.
According to the Channel Seven article, bread costs up to 73% more in Australia than the global average. Think about that for a moment. In our culture, bread is what we reach for as a food staple. You know, toast for breakfast, sandwiches for lunch and sometimes dinner rolls before our main course. Australians like their bread. It is one of those must-have items for most of us.
And here's the kicker...we're paying almost double what similar countries are paying when we produce our own wheat, and the price of Australian wheat has gone down 5% in the past year...
To be fair, the war in Ukraine caused massive disruptions to the global wheat-market. This has had a flow-on effect to all bread products throughout the world for the last few years. But it doesn't explain why our bread costs more than most other countries.
So what happens, when you have higher prices already and then supply is impacted by something real?
Get ready for the coming chocolate famine.
Okay, maybe you're not feeling it like I am. Maybe you're one of those strange individuals who doesn't like chocolate. In How Low Can You Go I talk about unsweetened cocoa as my choice for taking to a deserted island. Yes, it has lots of great nutritional benefits, but if I am alone, I'm going to need some mind-altering substances, and this is one of the few legal ones. According to science, cocoa is a mood booster that can release stress and has an antidepressant effect. It even has traces of Serotonin, and I don't need to go to a pharmacy for it.
However, my drug of choice has been getting more expensive. The iconic "glass and a half" block of Cadbury chocolate has been shrinking for 15 years, while the price has gone in the other direction.
In 2008 the standard block of Cadbury Dairy milk was 250g and regularly discounted to under $3.00. It was marketed as just the right size for a family of four. Now it is 180g and costs $6.00.
Cadbury do not set the price, but they do determine the package size. Our iconic chocolate company are not alone in this - all chocolate manufacturers are doing it. This is because chocolate has had some additional challenges.
Two thirds of the world's cocoa supply comes from West Africa. Over the past decade production of cocoa has been hit hard by multiple factors - the Ebola virus, unsustainable deforestation practices, Covid-19 and a number of challenging weather conditions. More recently there has been an epidemic of black pod disease followed by a drought which is expected to continue.
Food manufacturers reported that earlier this year they were paying double the price for cocoa over last year's prices. As a herald of things to come, cocoa futures in stock markets around the world have recently quadrupled in price.
Coffee is also expected to increase in price.
The global green coffee bean trade has had the perfect storm of increasing demand, while supply routes have been hampered by political unrest in the Red Sea and in the Middle East.
For those of us who like to join friends at a local café for our favourite brew, the picture is even more bleak. Two thirds of that cup of coffee is wages and operating costs for the café and these have also risen significantly. So much so that Professor Emma Felton in The Conversation this week advises that we aren't paying enough for that cup of coffee, and it is going to have to go up if our small independent cafes are to survive.
Our café culture is an important part of what makes our cities and towns vibrant and interactive place to be. Even if you never enter a café, imagine how different our streets would feel if we had less of them.
What can we do about it?
In How Low Can You Go? I provide a range of strategies for what to do when a favourite food becomes too expensive. I even show you how you can swap out bread for easier, more nutritious alternatives that don't require the daily grind of making sandwiches.
The basic principle is to extend it, reduce it or swap it out for something similar.
Popcorn is an example of a swap out for sandwiches in How Low Can You Go? The sesame popcorn recipe can feed a family of four lunch for a week for about the cost of one loaf of bread.
I suspect that this is what our chocolate manufacturers will do. Most of the time when we reach for chocolate what we're reaching for is something coated in chocolate. As we already have a high price and cocoa is not the number one ingredient in most of our chocolate products, hopefully the costs on these products won't change. Some of us, of course, will continue to pay for their favourite block of chocolate whatever the price.
Are these food prices a sign of things to come?
Bread, coffee, and cocoa have differing reasons for the price hikes, but the end result is the same. For more than thirty years various researchers, economists and the World Food and Agriculture Organization have been predicting that food shortages were coming right about now.
Human societies have pushed the envelope on food production to remarkable levels. I have no doubt that we will continue to do so, even as weather events, pandemics, political unrest, the loss of pollinators, challenges with fertilizers and disease epidemics in crops, take their toll.
It is not so much that we won't have food on the shelves in the supermarkets in the years to come, but that an increasing number of ordinary Australians will have to put back items that they used to take for granted because of continuing cost increases.
The temptation then will be to reach for the cheap food that fills our bellies but doesn't nourish us.
While the media will continue to point the finger at the lack of competition in our food sector, (and rightly so), there is a bigger picture unfolding globally that we also need to be aware of.
Kimberley Gillan
For more information on this post:
World Food Price Index - Australia
Chocolate prices continue to rise
Coffee and the Red Sea Conflict
Prof. Emma Felton, The Conversation
Food insecurity - World Food Programme
Credits:
Woman holding egg Georgia de Lotz Unsplash.com Angry woman Noah Buscher Unsplash.com Family making sandwich unknown Getty Images Cafe Photo Reina Yoshida Unsplash.com Popcorn bowl Mihai Moisa Unsplash.com Storm clouds over crops unknown Getty images