Cocoa prices reached their highest level in more than a decade last week, owing to mounting concerns about future output at a time when available inventories are already depleted.
New York cocoa futures increased to $3,552 per metric ton, having previously peaked at $3,569 per ton, the commodity’s highest price since March 2011.
Experts attribute the price increase to a decrease in worldwide supply of the goods.
“I don’t think we’ve ever had three consecutive years of deficit,” soft commodities specialist Judith Ganes told Reuters, adding that harvests in western Africa, where the majority of cocoa is grown, are at risk of diminishing production.
Analysts worry that lower fertilizer use by farmers due to high costs and unpredictable weather threatens the amount of cocoa that major growers Ivory Coast and Ghana can produce. They also predict a strong dry season beginning in November, as the El Nino weather pattern often suppresses rains in West Africa.
According to Bloomberg, Ivory Coast’s cocoa bean crop will be 20% lower in 2023 than it was last year. In Ghana, it is expected to be lower than the historical average. Due to the shortfall, prominent chocolate manufacturers Lindt and Hershey Co. issued a price rise warning.
The industry’s dilemma may have an impact on more than just the quantity of items.
