Gifting your loved one chocolates on Valentine's Day is a time-honoured tradition, but this year's record high prices could put a damper on the romance.

Your favourite chocolate treat costs on average 10.3 per cent more than it did a year ago, according to Rabobank retail price data.

That's higher than the latest Consumer Price Index (CPI) figure for the snacks and confectionery category, which went up by 6.8 per cent.

The main factor behind the bittersweet hike is a global shortage of cocoa — the large, fatty seeds collected from cacao trees to make chocolate.

Here's why industry experts say they're in decline, and what you can do to help make chocolate production more sustainable.

So what's going on?

Rabobank associate analyst Pia Piggott said the price of cocoa had surged by 144 per cent over the past year due to the continuing shortage.

"It just keeps going up, so it continually reaches new records," she said.

Rabobank forecasts a third consecutive cocoa deficit of 160,000 metric tonnes in 2024, which hasn't happened before, according to data going back to 1960.

Ms Piggott said it would force companies to dip into their declining stockpiles and likely keep prices "quite high" for the rest of the year.

Nick Southon is the general manager of the Queensland-based Noosa Chocolate Factory, which handcrafts chocolate-coated nuts and berries.

He said the business tried to stay "a step ahead" of rising costs by reducing production of less profitable items and increasing its own prices over time.

"It's a little bit of a perfect storm, with lower productivity from the cocoa farmers and then slightly lower demand," he said.

Professor of accounting and finance at Macquarie University, John Dumay, spoke to the ABC from the Chocoa trade fair in Amsterdam last week.

He said major producers like Nestlé and the parent company of Cadbury, Mondelēz International, were also concerned about the future of the $130 billion (AU$199 billion) chocolate industry.

"Price fluctuations in the past have come and gone, but now they're talking about real structural changes in production."

What's driving the cocoa shortage?

The majority of the world's chocolate production relies on cocoa beans grown in West Africa, with Côte d'Ivoire and Ghana contributing about two-thirds of the output.

The drop in cocoa yields in the region has been driven by a combination of short-term factors like bad weather and disease, as well as long-term deforestation and declining numbers of cocoa farmers.

"We've had about three years of really bad harvests," Professor Dumay said.

"A lot of that's blamed on El Niño and climate change. There's also a problem with a mealybug infection in the roots of some of the cacao trees, which is causing them to die back."

Associate Professor in social and environmental accounting at the University of Wollongong, Stephanie Perkiss, said cocoa yields had worsened due to "cyclical events" triggered by vast deforestation.

"It also contributes to climate change impacts ... the rain and weather is becoming more extreme and those wetter climates are causing the ground to be wetter and for the trees to be at increased risk of disease."

Associate Professor Perkiss said Côte d'Ivoire and Ghana had lost around 94 per cent and 80 per cent of their forests respectively, with around one-third of the loss due to land clearing for cocoa farming.

While some chocolate producers had taken steps to address these environmental issues, she said many were still recording profits at the expense of farmers who earned less than $1 per day.

Professor Dumay added, with few cocoa farmers earning a living income, they were forced to turn to child labour, which then resulted in long-term health impacts on children exposed to dangerous agrochemicals.

"The average cocoa farmer is male and over 50, living in countries where the life expectancy is about 59 years of age," he said.

"One of the [trade fair] delegates from the Ivory Coast said they have a saying: 'the child is not going to take on the work that he sees is killing his father.'"

What can you do to help make chocolate more sustainable?

Professor Dumay said it's not just chocolate manufacturers that are responsible for solving these complex structural issues.

"It's also civil society, its consumers and its governments, both here [in the West] and in Africa that need to come together and resolve these problems," he said.

He has worked with Associate Professor Perkiss, among a group of other researchers and consultants, to develop the Chocolate Scorecard, which surveyed 38 of the world's largest chocolate brands and producers. 

The scorecard rates the companies according to their performance in giving farmers fair wages, managing agrochemicals, the impact they have on the environment, and whether they rely on the use of child or forced labour.

Associate Professor Perkiss said it was a way of keeping companies accountable and helping chocolate lovers use their purchasing power to influence the industry.

Mr Southon, from the Noosa Chocolate Factory, said he noticed consumer behaviour had started to shift following the COVID pandemic, with more people turning to local and eco-conscious businesses like his.

"We're really proud of employing locals and I think that's well supported ... we recycle any chocolate that sits or doesn't sell during Valentine's Day. We can just make them into something else, so we have literally zero waste."

"And everything is packaged by hand, so we haven't got 5,000 wrappers plugging through a machine and then having to unwrap stuff when it comes back."

From January 2025, a new law in the European Union will take effect requiring manufacturers to prove their products do not originate from recently deforested land or have contributed to deforestation.

"It's just a matter of time before other Western governments follow the EU's lead in trying to ensure that their cocoa is being produced more sustainably," Professor Dumay said.

"There's been some progress made, but there's still a lot more progress to be done."