Turkiye's chocolate crisis is at the door, the price may skyrocket

Published 2024년 3월 29일

Tridge summary

The global cocoa market is experiencing its most significant supply deficit in over 60 years, largely due to adverse weather, diseases, and aging trees in West Africa, particularly in Ivory Coast and Ghana, which are major cocoa producers. This situation has led to a sharp increase in cocoa prices, with a forecasted rise of 129% in 2024, affecting both chocolate companies and consumers. Companies are employing hedging strategies to cope with price volatility, but consumers might soon face higher chocolate prices or smaller product sizes, especially for dark chocolate. Contributing factors include diseases like black pod and swollen shoot virus, climate phenomena such as El Niño and harmattan winds, a shift by some farmers to more profitable crops, and fixed pricing by governments in Ghana and Ivory Coast. The impact on consumer prices is expected to be most pronounced by the end of this year or early 2025. Additionally, the confusion over the factors influencing cocoa prices, including potential diseases, climate change, and the impact of the Ukrainian war on fertilizer availability, is highlighted by industry experts, indicating a challenging period ahead for chocolate lovers.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Consumers may begin to see the impact of rising cocoa prices as the world faces its biggest supply deficit in decades as farmers in West Africa struggle with bad weather, disease and dying trees. Cocoa for May delivery closed 0.3 percent lower at $9,622 per tonne, after rising to an all-time high of $10,080 per tonne on Tuesday. The cost of cocoa more than tripled last year and will rise 129 percent in 2024. Hershey CEO Michele Buck told CNBC last month that the company has a hedging strategy to manage price fluctuations. The industry is working with retailers to "lower costs" and keep chocolate affordable for consumers, the U.S. National Confectioners Association said in an email. COCOA SUPPLY GAP IS LARGE Paul Joules, a commodities analyst at Rabobank, said that although the big chocolate companies were well protected last year and did not have to immediately pass on higher prices to consumers, there was only so much the industry could do to absorb the costs. Joules noted that ...

Source: Bursahakimiyet