Cocoa prices have come close to their highest level in nearly half a century in the context of a drop in global supply.
The prices of cocoa futures in New York increased above 4,200 USD/tonne, the highest for this item since September 1977, passing its peak in 2011 due to Ivory Coast’s ban on cocoa exports at that time. Cocoa prices (the main ingredient in chocolate production) have increased sharply by about 75% since the beginning of the year.
Cocoa prices have increased to near 50-year record.
Experts said that the strong increase in cocoa prices was due to crop failures in Ivory Coast and Ghana, which supply 60% of the world’s cocoa. The weather was unfavorable and many cocoa areas faced diseases. Cocoa production in both countries has decreased sharply compared to the previous year. This raises fears of further tightening of an already undersupplied market, according to local media.
According to Trading Economics, Ivory Coast exported 348,560 tons of cocoa from October 01 to November 12, which was 25.3% lower than the same period last year.
Analysts also noted that the sharp rise in cocoa prices could be a threat to global supply since El Nino is forecast to cause drought in West Africa for months in the coming time. Supply shortages have become more serious due to increasing global demand for cocoa beans, especially in leading chocolate producers such as Europe. Meanwhile, Brazil and Ivory Coast have started to raise prices in recent months.
According to the International Cocoa Organization (ICCO), the global cocoa market is estimated to be in deficit of about 116,000 tons in the 2022-2023 crop, lasting from October 2022 to September 2023./.