World: Chocolate crisis is coming

Published Mar 28, 2024

Tridge summary

The global cocoa market is experiencing its most significant supply deficit in over six decades, primarily due to adverse weather, disease, and aging trees in West Africa, notably in Ivory Coast and Ghana, which are major cocoa producers. This situation has led to a sharp increase in cocoa prices, with forecasts suggesting a 129% rise by 2024. The surge in prices is attributed to various factors, including climate change, diseases, and the indirect effects of the Ukrainian war on fertilizer availability. Major chocolate manufacturers are employing hedging strategies to cope with price volatility, but the escalating costs might lead to higher consumer prices, smaller chocolate bars, or altered recipes with less cocoa content. The impact on chocolate prices is expected to be more noticeable by the end of this year or early 2025, especially for dark chocolate products.

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