World: Cocoa breaks $10,000 record, with pricier chocolate to follow

Cocoa Bean

Published Mar 27, 2024

Tridge summary

Cocoa futures have experienced a significant rally, surpassing $10,000 a ton due to poor crops in major West African countries, leading to a third consecutive annual supply deficit. This price surge is attributed to the compounded effects of low returns for cocoa farmers, concerns over bean supply, and financial market dynamics, including traders covering short positions. This increase is expected to impact consumers as chocolate makers may pass on higher costs or adjust product offerings. Additionally, upcoming EU regulations and a predicted decrease in Ivory Coast's mid-crop harvest could further tighten supplies, despite efforts to boost production in other regions.

Disclaimer: The above summary was generated by a state-of-the-art LLM model and is intended for informational purposes only. It is recommended that readers refer to the original article for more context.

Original content

(MENAFN- The Peninsula) Washington Post Cocoa futures surged above an unprecedented $10,000 a ton, extending a historic rally that's already seen prices double this year and which is raising the cost of chocolate. The market is being rattled by poor crops in key West African growers that has put the world on course for a third straight annual supply deficit. The industry is grappling with the legacy of poor returns paid to cocoa farmers and fears are mounting about being able to source enough beans. As well as concerns about scarce physical supplies, pressures are also building in the financial market, where some traders have sold futures to hedge against physical holdings. But as they wait for the contracts to mature they need cash to meet margin calls on losses on derivatives, and in a rising market can be forced to close out short positions, helping to fuel the rally. Futures jumped as much as 4.5% to $10,080 in New York on Tuesday - a level that seemed unthinkable only a few ...

Source: Menafn