Mondelez Says Oreo Cookie Prices Won’t Be Hiked Despite Cocoa Chaos In West Africa

Junk food maker Mondelez International remains optimistic that cocoa prices will drop at some point next year despite a global shortage sparked by adverse weather conditions in West Africa. This week, futures contracts in New York topped $10k/ton again. And the company reassured investors that it won’t raise prices on its chocolate-based products to protect its sales volume. 

“My most probable scenario into next year is that costs will come down,” Chief Financial Officer Luca Zaramella said during the 4th Annual Evercore ISI Consumer & Retail Conference held virtually this week. 

Zaramella, who was first quoted by Bloomberg, revealed that Mondelez, the maker of Oreo cookies and Toblerone bars, is well-prepared to purchase cocoa at lower prices. He also acknowledged the possibility of a temporary gap between high cocoa costs and affordable chocolate prices.

“The name of the game for us is — particularly in a context where we believe chocolate costs will come down — to go through a potential temporary dislocation and protect volume and share as much as possible,” he added.

The comments come as cocoa prices in New York surged above $10k/ton this week on the news the world’s top producers, Ivory Coast and Ghana, are experiencing worsening shortages of the bean.  

Here’s our latest reports: 

Cocoa Mess: Ivory Coast Bans Some Bean Sales As Global Supplies Tighten Further
Rollercoaster: Cocoa Prices Surge Above $10,000 A Ton As Global Supply Fears Worsen

With prices above $10k/ton this week, commodity trader Pierre Andurand, who turned cocoa bull in March, is still bullish on his $20k/ton price target for later this year or next on the thesis of a continued slide in the inventory-to-grinding ratio.

So, will Zaramella’s forecast of slumping cocoa prices next year be correct? Or will the junk food maker cave and eventually raise prices for consumers?