Are we running out of chocolate? Why the world's favorite treat could get a lot more expensive--and harder to find.

• Author: Wilmore, Kathy
• Position: ECONOMICS

The next time you eat a piece of chocolate, slow down and savor every bite. There could come a day when this relatively cheap treat is a lot more expensive and harder to find. That's because the rate at which people are gobbling up chocolate far outpaces the rate at which farmers can produce cocoa, its key ingredient.

Cocoa is the powder or paste made from dried, crushed cocoa beans, the seeds of the cacao tree. You can wolf down a chocolate bar in seconds, but cocoa beans are a labor-intensive crop that's difficult to grow.

Last fall, two major chocolate companies--Mars Chocolate, based in New Jersey, and Barry Callebaut, based in Switzerland--issued a warning: If people keep eating so much chocolate, there won't be enough to go around.

That day could arrive sooner than you think. In 2013, the world consumed about 77,000 tons more cocoa than was produced. The two chocolate makers estimate that the global cocoa deficit could reach 1 million tons by 2020, and 2 million tons by 2030.

"We're not in crisis mode yet," says Edward George, a cocoa expert at Ecobank. But "there is a concern that we could have shortages of cocoa in the future."

Why is the world's favorite indulgence at risk? Like all products, chocolate is subject to the law of supply and demand. When demand (the amount people want to buy) is greater than supply (the amount available), prices tend to rise. When supply is greater than demand, prices tend to fall. Demand for cocoa has exceeded supply for the last several years.

More Expensive Hershey Bars

That's why cocoa prices have risen by more than 60 percent since 2012. When manufacturers have to pay more for raw materials, sooner or later they pass the costs on to consumers. That happened last summer, when Hershey's announced an 8 percent price hike, its first price increase since 2011. Other chocolate companies, including Mars, the maker of M&M's and Milky Way, followed suit.

Despite the cocoa shortage, shoppers probably haven't noticed any reduction in chocolate-flavored products in stores. So far, food companies have been able to keep up. That's because cocoa processors still have stockpiles to keep candy and food makers supplied. But those reserves are dwindling.

Can the cocoa shortage be fixed by planting more cacao trees? Unfortunately, it's not that simple. Most cacao trees are grown on small family farms in poor countries. Forty percent of the global cocoa bean supply comes from Cote d'Ivoire (Ivory Coast) alone, which has a per capita GDP of only $1,800.

Unlike growing corn or wheat, which can be planted in vast fields and harvested with machinery, harvesting cacao is a slow, painstaking process, all of it done by hand.

A cacao tree can produce up to 70 pods a year, each of which must be cut down and chopped open. The seeds are then collected and cleaned of the gooey white pulp that surrounds them. Those seeds--cocoa beans--are dried and fermented for at least a week. Then the farmer bags the beans and ships them to companies that process the beans into the powder, paste, and liquid forms used by food and candy makers.

More trees would require more workers, but few cocoa farmers can afford to pay a crew's wages. Instead, many rely on much cheaper slave labor (see "Slaves to Chocolate").

No Future in Cocoa?

Cocoa farmers also have to cope with plant diseases, like frosty pod rot, and insects that destroy plants. Such blights cause "losses as high as 30 percent to 40 percent of global production," according to the International Cocoa Organization. Unusually dry weather in West Africa, where more than 70 percent of the world's cocoa is produced, has also been a factor.

Because of all these problems, many farmers are shifting to crops like corn and rubber, which are easier to grow and more resistant to extreme weather.

"Farmers are at the bottom of the chain, and they're not getting any richer, thus they don't see a future in cocoa," says Edouard Rollet, co-CEO of Alter Eco, a fair-trade company in San Francisco, California, that works with cocoa growers in Latin America. "So farmers [in West Africa] are planting rubber trees instead of cocoa trees."

As the global...