News
Cocoa prices reach record highs: Consumers brace for impact
Consumers around the globe could soon feel the pinch as cocoa prices soar to unprecedented levels, driven by a perfect storm of supply shortages and escalating production costs.
-
Unprecedented Cocoa Price Surge: Cocoa prices have skyrocketed to record highs, tripling in the past year and hitting $10,080 per metric ton for May delivery.
-
Severe Supply Shortages: The cocoa market is grappling with its worst supply deficit in decades, driven by production challenges in key regions like Ivory Coast and Ghana, including adverse weather and diseases.
-
Potential Impact on Consumers: Consumers may soon face higher chocolate prices or reduced product sizes (“shrinkflation”) as manufacturers grapple with soaring cocoa costs, potentially altering recipes to contain less cocoa.
The world is grappling with one of the most severe cocoa supply deficits in decades, with farmers in West Africa bearing the brunt of adverse weather conditions, rampant diseases, and aging cocoa trees.
Cocoa futures for May delivery reached an all-time intraday high of $10,080 per metric ton on Tuesday before settling slightly lower at $9,622, marking a staggering 129% increase in 2024 alone.
Over the past year, cocoa costs have more than tripled, placing immense pressure on chocolate manufacturers and raising concerns about the affordability of chocolate products for consumers.
Major players in the chocolate industry, such as Hershey, are implementing hedging strategies to mitigate the volatility in cocoa prices.
However, the National Confectioners Association acknowledges the challenges, stating that the industry is collaborating with retailers to manage costs and prevent significant price hikes for consumers.
Consumers may start to notice increase in chocolate prices.
Further shrinkflation
Analysts warn that despite the efforts to shield consumers from immediate price shocks, the impact of soaring cocoa prices is inevitable.
Paul Joules, a commodities analyst at Rabobank, predicts that consumers may start experiencing higher prices or “shrinkflation,” where chocolate bars decrease in size to offset rising production costs.
Additionally, companies might adjust recipes to use less cocoa in their products, potentially affecting the taste and quality of chocolate, especially in dark chocolate variants.
Disease plague
The surge in cocoa prices is primarily attributed to supply disruptions in key cocoa-producing nations such as Ivory Coast and Ghana, which together contribute to 60% of global cocoa production.
These countries have been plagued by diseases like black pod and swollen shoot virus, coupled with adverse weather conditions exacerbated by phenomena like El Niño and seasonal winds.
Moreover, many cocoa trees in these regions have surpassed their peak productivity, with limited efforts towards replanting since the early 2000s.
As a result, farmers are abandoning cocoa cultivation in favor of more lucrative crops like rubber, further exacerbating the supply crunch.
News
Pope Francis dies aged 88 as world mourns historic papacy
The world mourns Pope Francis, the transformative first Latin American pontiff, who died at 88, with global tributes and a nine-day mourning period ahead of a conclave.
News
Pope Francis was a spiritual giant who championed humility
Pope Francis, aged 88, dies from double pneumonia, leaving a legacy of compassion and inclusion as the Church’s first Latin American and Jesuit leader.
News
Pope Francis dies, ending 12-year papacy
Pope Francis, the first Latin American Pope, dies at 88 after 12 years of tackling division and reform in the Church.
-
News2 days agoTariffs disadvantage PepsiCo in cola competition with Coca-Cola
-
Tech5 days ago
Nvidia to build AI supercomputers in the U.S. for first time
-
Money2 days ago
Earnings reports, tariffs reshape market outlook this week
-
News1 day ago
Pope Francis dies, ending 12-year papacy
-
News2 days ago
Trump’s economic goals may harm markets and consumers
-
Politics5 days ago
Trump pushes trade talks with Japan and Europe amid tariff turmoil
-
Politics2 days ago
Small business tax cut boosts economy, creates jobs
-
News1 day ago
Pope Francis was a spiritual giant who championed humility
