The global cocoa market is on the verge of a big jump in prices

Published 2024년 12월 5일

Tridge summary

Cocoa bean prices, which surged to multi-year highs before falling slightly, are expected to remain high due to a potential structural supply-demand deficit. This deficit is attributed to a significant drop in global cocoa production, especially in Ivory Coast and Ghana, due to factors like El Niño, aging trees, and the cacao swollen shoot virus. The virus is estimated to affect 67 percent of cocoa farms in West Africa, which could lead to a collapse of production in Côte d'Ivoire and Ghana. The situation is further complicated by new deforestation laws, global fertilizer shortages, and the geographic limitations of cocoa cultivation, which make the supply vulnerable to regional shocks.

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

Original content

The outlook for cocoa beans offers unwelcome news for chocolate producers hoping for lower prices, the Financial Times reports. After the explosive rally in the first four months of the year, prices have cooled somewhat. After starting the year at around $4,400 a tonne, cocoa bean futures peaked at $12,000 in April - well above the inflation-adjusted decade average of $3,400. However, by May, prices had fallen to $7,000 a tonne. But the break is likely to be temporary. The prospect of a multi-year structural supply and demand deficit for cocoa beans will mean much higher prices are coming. This is likely to catch out many chocolate makers who have bet on a more sustained price decline, depleting their stocks while reducing price hedges from eight to nine months of demand to five months. Strong pod numbers recorded from May to August have raised hopes among growers that a recovery in production will replenish stocks, especially after the 500,000-tonne shortfall in the 2023-24 ...

Source: Trud