Cocoa prices are at a record high and some of the world’s biggest chocolate producers are sounding the alarm as the Valentine’s Day buying surge approaches.
The output for cocoa producers in Ghana and Ivory Coast, which alone are responsible for 60% of the world’s supply, is under threat thanks to poor weather and climate change. Increased crop disease from earlier rains and recent dry conditions caused by the El Niño weather phenomenon have led to poor harvests, according to a Friday report by London-based economic research firm Capital Economics. Global cocoa production could fall by double digits this year due to these factors, the research firm predicted.
As a result, the key chocolate ingredient’s price has skyrocketed and chocolate prices could soon follow.
Thanks to an increasingly tightening supply, cocoa futures jumped as high as $5,798 per ton on Friday, their highest level going back 65 years, according to data compiled by Bloomberg. In just the past year, cocoa futures have soared more than 120%.
Michele Buck, CEO of The Hershey Company, said on the company’s fourth quarter earnings call Thursday that high cocoa prices are “expected to limit earnings growth this year,” and added that the company would consider raising prices if necessary.
“We remain committed to our long-term strategy of pricing to cover raw material inflation and we expect several points of price realization this year,” Buck said.
Her warning comes a month after Luca Zaramella, the chief financial officer of Mondelēz, Cadbury’s parent company, warned that the company had seen “significant” price increases for cocoa and sugar. Zaramella had previously said in September that the company would continue its price increases from 2023 to help offset higher cocoa commodities costs, and that it will do it in a way that “eases both retailers and consumers into new pricing,” according to Food Navigator USA.
Mondelēz and Hershey did not immediately respond to Fortune‘s request for comment.
Chocolate prices have already increased 17% over the past two years, Bloomberg reported, citing data from consumer researcher Euromonitor International. And rising prices could take a bite out of chocolate demand, analysts at Capital Economics predict.
“Although it has been relatively resistant up until now, demand will inevitably start to falI as manufacturers pass on the higher cocoa cost (and other inputs, such as sugar) to consumers,” the analysts wrote.