LONDON, July 24 Reuters Nestle may flag more price hikes on its chocolate products when the world39;s biggest food maker reports firsthalf earnings on Thursday, making Kit Kat bars and Smarties more expensive by Christmas.

Over the past three years Nestle and other consumer goods companies have raised prices across their brands to cover skyhigh input costs amid supply chain issues after the pandemic. In recent quarters, the costs of most commodities have started to decline again but cocoa has nearly doubled in price this year amid shrinking supplies.

As companies like Nestle raised their chocolate prices, they ceded sales volumes to cheaper rivals including Tesco and other supermarkets39; own brands.

Swissbased Nestle is forecast to report total real internal growth a metric for sales volumes across its products from chocolate to coffee and other food was negative in the first half, falling 0.5 from a year earlier, according to a company provided poll.

Traders and analysts said the worst is yet to come for Nestle and its competitors when it comes to lost sales volumes of confectionary products.

Chocolate companies buy cocoa up to 12 months in advance of making and selling products. In the first quarter of this year when cocoa prices tripled, cocoa traders told Reuters many in the industry still had to stock up on the commodity.

Chocolate makers39; production costs will go up in the fourth quarter, that39;s for sure. They buy cocoa contracts 912 months ahead and…