Chocolate Shortage: The Impacts To The Stakeholders

Submitted By Oszarian-Kurniawan
Words: 568
Pages: 3

Oszarian Wahyu Kurniawan
EIL 320 – 01
Summer 2014

Chocolate shortage: The Impacts to The Stakeholders
Some experts report that a chocolate shortage is looming. In recent years, the demand for cocoa beans in the Philippines has increased to around 90,000 tons per year (Tacio, 2014). However, Filipino farmers are only producing 6,000 tons of cocoa beans every year, far below the demand. The Philippines are not the only country with shortages. In fact, there are experts that report a global cocoa shortage is looming. Should a shortage occur, the world must face higher prices, market instability, and job loss. The price increase is the direct effect of chocolate shortage. According to Knepper (2013), cacao tree needs five to six years to yield and after which, the tree will only be able to produce for 25 years. Because the supply is limited, many companies will have to increase their price. Angus Kennedy, a professional chocolate taster for major manufacturers says that now people are prepared to pay $113 per kilogram (Sayid, 2013). This price is incredibly high and not affordable for many businesses. The second impact that will come is about market instability. This problem results when products are suddenly more expensive. Edward George, the head of soft commodities research at Ecobank Group in London says that chocolate will change its position into a very luxury product, just like champagne (Moneynews, 2014). This chocolate shortage will cause the company to make a big change to their marketing plan, from selling chocolate to kids into selling chocolate to rich people. Only a few people can afford the final product of cocoa. As a result, many factories and companies will have less profit and to become profitable again, they will cut costs because they have to produce less chocolate for fewer people. Increasing price of chocolate and the bankruptcy of chocolate companies also will cause employees and farmers lost their job. The Lutheran World Relief (2010), a non-profit organization records that cacao farmers depend their lives and protection on the factories. According World Cocoa Foundation (2012), the number of farmers around the world is around 506 million people. As we can guess, the factories become bankrupt, automatically hundreds million farmers will lose their income from cacao. Chocolate shortage seems like a little problem; however, it is actually bigger than most people think. It’s not only a problem to consumers, but also the factory,