Cocoa futures prices have surged to their highest levels due to concerns over a weak global supply, triggered by drought and crop issues in West Africa. This situation is causing difficulties for traders and may compel chocolate manufacturers like Hershey's to increase their prices. Despite their marketing strategies and productivity efforts, these higher costs are anticipated to restrict revenue growth. Even with improved weather conditions, the recovery of the supply chain is expected to be slow, as new cocoa trees take years to bear fruit and farmers require more income to invest in their farms.
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According to ISNA, traders faced difficulties to buy cocoa this week with futures prices rising to their highest levels due to concerns about weak global supply after drought and crop problems in top producers in West Africa. Michel Buck, CEO of the company, stated that the price of this very important material is reaching historic levels. While its marketing plans, innovation and productivity efforts are helping, higher costs are expected to limit revenue growth this year, he added. Cocoa futures in New York saw prices double after a year as West African producers were hit by severe weather and hit a record. Confectionery sales rose 2.1 percent in the fourth quarter in North America, with prices rising but volumes falling, industry manufacturers said. Net sales are expected to grow between two and three percent in 2024, driven primarily by higher prices that the company had previously planned, and prices could rise further. Rising raw material costs are already weighing on ...