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Cocoa prices reach a 44-year high
FILE PHOTO: Farmers work at a farm in Sinfra, Ivory Coast April 29, 2023. REUTERS/Luc Gnago/File Photo
Cocoa prices have recently experienced a remarkable surge, reaching their highest level in 44 years due to worldwide shortages, leading to increased production costs for chocolate manufacturers. In New York, futures trading saw a notable increase of up to 2.5%, marking the highest point for the most actively traded contract since 1979. The driving forces behind this surge are predictions of poor crop yields in the primary cocoa-producing nations, Ivory Coast and Ghana, occurring at the same time as a noticeable improvement in demand.
Cocoa for December delivery soared to $3,786 per metric tonne in New York, reaching its highest value since January 1979. This price surpasses a previous peak reached in March 2011, when a civil war in Ivory Coast led to a cocoa export ban. The key ingredient for chocolate production has surged by more than 40% this year, making it the commodity with the most substantial increase.
Bean deliveries to ports in Ivory Coast are approximately 16% behind this season, and analysts are anticipating a third consecutive deficit for this essential chocolate ingredient. Adding to these concerns is the looming threat of a strong El Niño, which could bring drought conditions to West Africa, further damaging cocoa crops. Demand is also on the rise, as bean processing in Europe is performing better than expected. Ivory Coast and Brazil are both increasing their cocoa processing activities.
In the past, cocoa prices surged during the 1970s due to supply shortages, reaching a peak of $5,379 per tonne in July 1977.
