The price of candy has risen considerably, and when a price goes up, there are always two school of thought. One argument is that greed and “big candy” has jacked up the price in pursuit of higher profits. The challenge for this explanation is to explain why big greedy companied had not already raised prices last year, or the year before. It seems implausible that their level of greed suddenly increased, and if or when candy prices fall again, will it mean that they deserve praise for diminishing their greed? The alternative explanation is rooted in factors affecting candy supply. Natalie Ho provides details in “Why is candy so expensive these days?” (Monthly Labor Review: US Bureau of Labor Statistics, September 9. 2026).
Here’s the basic pattern: the orange line shows the overall inflation rate as calculated by the Consumer Price Index; the blu line show the inflation rate for the “candy and chewing gum” subcategory.
Ho offers some basic facts. For example, about two-thirds of total annual US candy sales are linked to four holidays: Halloween, Christmas, Valentine’s Day, and Easter. Also, “[f]or the U.S confectionery industry, approximately 65 percent of ingredient costs come from three material inputs: cocoa beans (28.4 percent), sugar (8.7 percent), and corn syrup (28.1 percent).” Thus, events that drive up prices of key inputs–especially cocoa and sweeteners– will drive up the output price of candy.
For cocoa beans: “Global production dropped more than 13 percent in the 2023–24 season compared with the 2022–23 season, falling from approximately 5.044 million metric tons to 4.365 million metric tons. At the same time, global cocoa demand was estimated to decrease only 5 percent, dropping from 5.058 million metric tons to 4.810 million metric tons. … The decrease in global production stemmed primarily from Côte d’Ivoire and Ghana, the world’s largest cocoa producers. Together, they generally account for 50 to 60 percent of total global production. Both countries have experienced poorer weather conditions since 2021. In 2022, Côte d’Ivoire and Ghana had hotter and drier weather, reducing soil moisture and the size of beans. In 2023, Côte d’Ivoire received the highest total rainfall in its cocoa-growing regions in the previous 20 years. The excessive rain led to cacao swollen shoot virus and black pod disease, killing cocoa trees and destroying beans. The torrential rain also delayed deliveries to ports. Subject to similar problems, Ghana’s 2023–24 crop yield reached a 23-year low. … Further, speculation in the cocoa futures market also pushed prices higher. Hedge funds and other traders joined the cocoa market in droves starting at the end of 2023. By early 2024, traders purchased a record $8.7 billion worth of cocoa futures contracts between the London and New York markets. Although likely not the major cause of the rise in prices, these hedge funds contributed to the increase, with prices more than doubling over the previous year by 2024. With chocolate companies also attempting to secure supplies, the cocoa futures market reached prices not seen in over 40 years, as the futures markets were traditionally only used to hedge risk. From October 2022 onward, prices climbed sharply. They peaked initially in April 2024 at just over $11,000 per metric ton. … Later in the year though, prices resumed their ascent, climbing another 10 percent, reaching a record $12,565 per metric ton in December 2024. By comparison, from 2000 to the third quarter of 2022, cocoa future prices stayed between $1,000 and $3,500 per metric ton. This overall price increase did not, however, initially directly translate into higher prices for farmers, as contracts were signed 8 to 12 months prior to the 2023–24 season when cocoa futures were less than half of what they were in November 2023.”
On sugar: “Sugar in the United States is relatively expensive compared to the rest of the world, largely because of the United States sugar program that restricts sugar imports. Mexico has generally provided nearly half of United States sugar imports, with a policy beginning in 2008 that made Mexican sugar duty-free and quota-free. However, in 2014, the two countries suspended the quota- and duty-free policies and agreed to implement minimum price and quantity restrictions on imports of Mexican sugar, which led to an increase in sugar prices. … Many of the major sugarcane-producing states in central and southern Mexico experienced droughts in recent years, including a major drought in marketing year (MY) 2019–20 and a less severe drought in MY 2022–23. The 2023–24 season’s exceptional dryness reduced Mexican sugar production to its lowest volume in 24 years and its lowest export volume to the United States in 17 years. … In addition, global sugar prices increased as El Niño caused unusually dry weather in India and Thailand (the second and third largest sugar exporters globally), which resulted in reduced production in those countries in MY 2023–24. Port bottlenecks, fire, and competition from other crops for shipping services also affected exports from Brazil (the largest global sugar exporter). Further complicating the issue was competing uses for sugar, as 51 percent of Brazil’s 2023 sugarcane crop was used for their domestic production of ethanol.”
Of course, the supply shocks to input prices will affect the rest of the market. The quantity of nonseasonal chocolate purchased in the US has been declining since 2022. “Shrinkflation” happens when candymakers reduce the size of their products. But big price movements are almost always about changes in underlying condidtions of supply and/or demand, not fluctuations in greediness of sellers.
