NEW YORK (Agencies): The prices of cocoa, a key ingredient in chocolate-making, have surged to the highest level in over 12 years due to mounting concerns about future production amidst already low available stocks.

New York cocoa futures reached $3,552 per metric ton, reaching a peak of $3,569 per ton, the highest price recorded for the commodity since March 2011.

The sharp increase in prices is primarily attributed to a decline in the global supply of cocoa. Analysts warn that the western part of Africa, where the majority of cocoa is grown, is facing risks of reduced production.

Soft commodities analyst, Judith Ganes, stated, “I don’t think we ever had three consecutive years of deficit,” highlighting the potential scarcity of cocoa.

Factors contributing to the decline in production include lower fertilizer use by farmers due to high costs and extreme weather conditions, which are impacting the top cocoa growers, Ivory Coast, and Ghana. Moreover, the prospect of a strong dry season from November onwards, typical of the El Nino weather event, is likely to reduce rainfall in West Africa.

Bloomberg estimates indicate that Ivory Coast’s cocoa bean harvest is expected to fall by 20% in 2023 compared to the previous year, while Ghana’s harvest is projected to fall below the historical average. This shortage has prompted chocolate manufacturers Lindt and Hershey Co. to issue warnings about potential further price increases.

The cocoa crisis in the industry may not only affect the quantity of chocolate products but also their quality. Alongside higher prices, chocolate companies may consider reducing the size of their chocolate bars to mitigate the impact of rising costs, according to Bloomberg.

By Media

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