Increased supply facilitates competition which drives prices down. If you artificially inflate prices, you leave room for competitors to seize market share without taking losses.

Generally that's true, but there are cases where it isn't.

Suppose you increase prices at a rate exceeding that which decreasing supply would demand, in collusion with other suppliers. You use the proceeds to increase wages.

Some point in the future, supply increases back to normalized levels, but now the cost of supply has also increased (because you pay people more), so the wholesale prices remain increased. Prices can only drop back to levels of the new cost floor, or the cost floor has to be moved down somehow -- in this case reducing wages.

We see a similar effect in oil markets because the cost of oil production has gone up as easy-to-exploit sources have dried up and more expensive sources have had to come on-line to meet demand. Production has actually increased but prices have stayed relatively high. This includes massive new production outside of OPEC cartel control, so even cartel price fixing doesn't account for it. Even more important, in a major market like the U.S., the distribution costs have dropped as a share of wholesale prices as domestic supply has come on-line.

Consumers have simply gotten used to the higher prices so there's reduced pressure to lower them competitively in order to ensure sufficient demand to move target inventory volume.

There's also other factors than pure supply/demand. Product differentiation can build in higher prices through perceived value (or other factors) in consumer's minds. Suppose over the next 10 years, the U.S. chocolate industry creates a marketing term "Savanna Chocolate" and starts rebranding all products by percentage of "Savanna Chocolate" they contain. "Now with 5% Savanna Chocolate!", supplemented with a marketing campaign to push all products as "Savanna Chocolate". The term is meaningless. However, it allows them to charge a 10% premium on product which helps guarantee higher prices.

Because Savanna Chocolate is not a thing, there's nothing to compete against, it's also trademarked. A competitor can't simply start selling their cheaper "6% Savanna Chocolate" competitor because they'll be sued into oblivion, if they wish to use the term, they'll probably just be charged a license fee large enough to ensure price compliance. All they can do is start an information campaign to try to persuade the public that Savanna Chocolate doesn't exist. These don't necessarily translate into higher demand for a competitor's product, and may in fact deflate the entire industry.

tl;dr - pricing is hard, simple supple-demand models don't describe it very well.

Chocolate isn't, so far as I can tell, controlled by a cartel. It would be difficult to do that, because it's an agricultural commodity. It's hard† to organize every farmer around the world that can manage a grove of cacao trees, and --- unsurprisingly given the history of the product --- processing cacao into chocolate liquor doesn't require specialized technology.

Meanwhile, the branding effect you talk about seems to cut against your argument. If consumers are conditioned to seek out boutique chocolate, the barriers to entry into the chocolate market are lowered: large suppliers like Hersheys and Callebaut can't use their brand power to lock consumers in which harvesting their economies of scale.

Long story short: I think the 1-2-3-4 story you told upthread isn't very plausible. If chocolate prices rise and stay there, my guess is that's where they belong. If they didn't, one of the dozens upon dozens of boutique suppliers already vying for shelf space at Whole Foods and Safeway and Costco would sacrifice a little surplus profit to make a play for some of Callebaut's market share.

† Sugar is an exception, but there are extrinsic reasons for the market dynamics of sugar --- trade policy and subsidies being two big ones --- that are absent from cacao.

We'll see what ends up happening. My guess is that we'll see a number of market factors combine to sustain higher prices at the cash register, even if cacao prices fluctuate down.