Cocoa prices on the world market increased strongly in recent trading sessions, surpassing 10,000 USD/ton for the first time in history on March 26. Experts forecast that consumers will soon feel this increase when the world is facing the most serious shortage of cocoa supply in decades.
The price of cocoa delivered in May on ICE in the US ended the session with an increase of 3.9%, reaching a record of 10,030 USD/ton. Since the beginning of the year, the price of this item has increased by nearly 138%.
The unexpected increase in cocoa prices has raised concerns about the chain effect that may cause chocolate prices to rise when major economies around the world are struggling with inflation.
Shortage of supply pushes cocoa prices to record-high.
The world is facing its worst cocoa supply shortage in more than 60 years. Consumers could start to see a direct impact by the end of this year or early 2025. The International Cacao Organization (ICCO) forecasts a supply deficit of 374,000 tons for 2023-24, 405% more than the previous year’s 74,000-ton deficit.
According to CNBC, cocoa prices have increased more than 200% in the past three months from 4,280 USD in December 2023 and are more than three times what they were in 2023 at 2,902 USD/ton.
Experts believe that the sharp increase in prices is due to crop failures in West Africa as the two largest cocoa-producing countries, Ivory Coast and Ghana, struggled with extreme climate change and pandemics over the past several months.
Supply disruptions are most seen in the major producing countries, Ivory Coast and Ghana. These two countries account for about 60% of global cocoa production. As reported by the ICCO late last year, heavy rains and the spread of black spot disease on cocoa in the two countries have affected cocoa production.
The Vietnam Commodity Exchange said that severe supply shortages in major producing countries continue to push cocoa prices. According to the Ivory Coast Government, from the beginning of the season to March 24, cocoa shipments to ports in the country decreased by 28% compared to the same period last season, reaching 1.28 million tons. Along with that, Ivory Coast’s 2023-2024 cocoa production is estimated to decrease by 21.5%, to 1.75 million tons.
Cocoa prices have started to rise in 2023 due to global supply shortages. The market prices are increasing in 2024 due to bad weather in West Africa, the world’s largest cocoa-growing region. Thi is making supply scarce and putting pressure on product prices.
Rising cocoa prices have also affected the output of confectionery producers. Recently, Swiss food and beverage group Nestle announced a decline in its sales in 2023 after it decided to increase product costs by 7.5% due to the increase in the cost of raw materials, including cocoa./.
