Bloomberg — Cocoa futures have doubled in price in less than three months as their all-time high intensifies, driving up costs for chocolate makers and consumers.
The most active contract in New York rose as much as 5.9% to $8,493 per metric ton, the highest on record.
Crops in West Africa – the world’s most important growing region – have been hit by disease and a series of weather events, putting the world on course for a third consecutive supply deficit of the raw material.
Processing plants in the region are already suffering from shutdowns, and looming environmental regulations for European importers are increasing obstacles to obtaining grain.
Read too: Largest chocolate producer in the world warns that cocoa crisis will last until 2025
“There is still no visibility on the next harvest, and the challenge for Ivory Coast and Ghana is that no one knows how they can solve their production problems,” said Fuad Mohammed Abubakar, head of Ghana Cocoa Marketing Company UK. “There is no redemption of supplies in the coming months.”
The cocoa boom is accelerating just before Easter, an important chocolate-consuming holiday in some countries, including the United States and Brazil.
Although manufacturers buy beans months in advance, the rise is starting to have an impact, and some bars are becoming more expensive, smaller or filled with other flavors to lessen the impact.
“There are many players which have already announced price increases. We are also part of that group,” said Martin Hug, chief financial officer of chocolate maker Lindt, in a March earnings call.
“It is very difficult to predict at the moment what will happen to the cocoa market. But I think we controlled it the best we could.”
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Tags: Cocoa price doubles beginning year extends historic rally
