Factories are closing; a global chocolate crisis is at the door

Published 2024년 3월 28일

Tridge summary

The global cocoa market is currently experiencing its most significant supply deficit in over six decades, primarily due to adverse weather conditions, disease, aging trees in West Africa, and additional factors such as the El Niño weather event, the climate crisis, and a fertilizer shortage exacerbated by the Ukrainian war. These challenges have led to a 30-35% decrease in cocoa reaching ports, resulting in a sharp increase in cocoa prices. This situation is poised to affect consumers by the end of this year or early 2025, potentially leading to higher prices for chocolate products, changes in product sizes, or alterations in ingredients. While major chocolate companies have employed hedging strategies to mitigate price volatility, there's a limit to how much they can absorb before retail prices are impacted. Industry analysts are particularly concerned about the price of dark chocolate, which may see the most significant increases due to its higher cocoa content.

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. Paul Joules, a commodity 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 the world is facing the ...

Source: Haber7