News in brief:
– Global cocoa prices reach record highs due to supply shortages, impacting major chocolate manufacturers and consumers alike.
– Adverse weather conditions in West Africa exacerbate the situation, with fears of prolonged shortages and uncertainty surrounding future cocoa production.
Cocoa enthusiasts and farmers brace for significant upheaval as global cocoa prices skyrocket to unprecedented heights, driven by a frantic scramble for supplies. The surge in prices, reaching record highs, has sent shockwaves across markets, with implications rippling through local communities, particularly impacting farmers.
Major chocolate manufacturers like Hershey and Cadbury’s parent company, Mondelez, have already begun to feel the pinch. Hershey reported a significant decline in sales volumes, reflecting a consumer shift in response to rising cocoa prices. With sales volumes sliding and earnings growth stifled, the repercussions extend beyond the trading floor to affect everyday consumers.
West Africa cocoa output
In West Africa, a crucial region for cocoa production, adverse weather conditions exacerbate the situation. Strong Harmattan winds have damaged cocoa crops, further tightening supplies. The situation is dire, with industry experts cautioning that the squeeze may persist for months to come.
Benchmark cocoa futures surged to staggering heights, with London cocoa futures hitting a record 4,670 pounds per metric ton, according to a news report. In New York, ICE cocoa futures soared to an all-time high of $5,874 per ton. The doubling of prices since last year reflects the severity of the supply shortage.
Ghana, the world’s second-largest cocoa producer, faces a stark reality. Output for the current season is projected to plummet, compounding the global deficit. With fears mounting of a prolonged shortage, questions loom over the viability of next year’s crop.
Traders and industry insiders express grave concerns about the future. A looming deficit in the upcoming season paints a bleak picture, raising questions about the sustainability of cocoa production. The implications stretch beyond the cocoa market, affecting related commodities like sugar and coffee.
