Dining out? Be ready to shell out more as food commodity prices surge

With a rise in cocoa prices due to adverse weather conditions in the African regions as well as surging prices of palm oil, coffee beans, and sugar, the usual plate is all set to cost more

Soon, you'll have to shell out a heftier sum to satisfy those taste buds as eating out and ordering in are all set to get costlier. According to The Economic Times, bills at quick service and fine-dining restaurants may rise 5-8 per cent starting April as prices of cocoa, coffee, palm oil and sugar have surged over the past quarter. The report, quoting industry executives and restaurateurs, said this will be the first increase in nearly 1.5 years.

Sugar prices in FY24 increased by 10.8 per cent compared to the previous fiscal year, with current prices touching Rs 3,800 per quintal.

 

Increase in cocoa cost to kick chocolate prices higher

And it's not just restaurants that are slated to hike prices. The surging cost of cocoa will also make sweet chocolates slightly bitter.

The price of cocoa surged past $10,000 a tonne for the first time last week, as a dizzying rise in prices caused by poor harvests in Africa accelerated, the Financial Times reported.

The report revealed that cocoa futures were trading as high as $10,080 in New York, more than double their price only two months ago, as traders warned a global shortage of cocoa beans would herald higher price tags for chocolate bars.

Adverse weather conditions and disease outbreaks have significantly reduced crop yields in Ivory Coast and Ghana, collectively accounting for over two-thirds of the world's bean production. Years of persistently low prices have constrained farmers' finances in West Africa, preventing them from making necessary farm investments, the Financial Times reported. Consequently, many plantations are populated with aged, deteriorating trees susceptible to diseases and harsh weather conditions.

This situation has resulted in a global cocoa deficit for the third consecutive year, sparking an unprecedented price surge. Just two months ago, cocoa was trading below $5,000 in New York; a year prior, it was below $3,000. London cocoa futures have more than doubled since the beginning of February and have tripled more than the same period last year.

Palm oil to push packaged food items' prices

Moreover, packaged food items will feel the heat as well as palm oil prices have surged 10 per cent in the last three months due to reduced supply from Malaysia and Indonesia, the ET reported. Industry insiders are anticipating further increases in prices till early June. Palm oil is a key ingredient in most of the packaged food items.

Lazy mornings due to higher coffee prices

Your morning brew also may witness the ice of price ruining its freshness soon, as coffee gets costlier. A Motilal Oswal commodity insight report recently revealed that due to unseason rainfall, shortage of labour, and increase in demand is pushing the coffee inflation in double digits at 15.3 per cent year-on-year.

On the other hand, tea prices, though, have dropped on low export demand and sluggish rural consumption — down 10.2 per cent year-on-year and 21.1 per cent quarter-on-quarter, the Economic Times reported. However, the latest season of Darjeeling teas, newly introduced to the market, is commanding favourable prices due to the cultivation of a premium variety. Recently, a kilogram of Darjeeling tea sold for Rs 31,000.