Prices for chocolate and products made from it will almost double due to the increase in the cost of raw materials.
In the last week of March, the most active futures forcocoajumped 4.5% to $100.80 a ton in New York. And although they later fell to $9,622, according to Bloomberg, cocoa futures in London and New York more than doubled this year.
Focus writes about this.
Experts explain that this happened after news of financing problems in Ghana, which is the second largest producer of cocoa beans in the world. The fact is that the Ghana Cocoa Board relies on foreign funding to pay cocoa farmers. However, the country may lose access to a key financial mechanism due to the harvest crisis.
President of the Ukrkondprom Association Oleksandr Baldynyuk draws attention to the fact that the rise in prices is unlikely to be temporary, because this is a big systemic problem.
“For a long time, prices for cocoa beans remained low, so the sector did not attract the attention of investors,” the expert noted. “The cultivation of cocoa beans, localized in three African countries (Ivory Coast, Ghana and Nigeria), has been declining over the course of for many years: the trees were aging, the area was not increasing, the yields were decreasing. Recently, this has been compounded by weather conditions unfavorable for growing and harvesting, and the world is faced with a shortage of cocoa beans. Prices have not stopped yet: if over the past year they have increased by 50%, then almost doubled in the first three months of 2024. For comparison: in September 2022, cocoa beans could be bought for 2.5 thousand dollars per ton, in December last year – for 4 thousand dollars per ton, and now the cost has exceeded 9 thousand dollars.”
If before the start of a full-scale war Ukraine imported about 15 thousand tons of cocoa beans and 50-60 thousand tons of cocoa products per year, then today the annual import of cocoa beans is approximately 2-3 thousand tons, cocoa products – 35-40 thousand tons per year.
As a representative of the supplier of a company that is one of the leaders in cocoa bean processing, Andrei Kononenko says that in a situation of rising prices and shortages, the company enters the market and purchases cocoa beans at high enough prices to satisfy demand.
“Pricing occurs in accordance with stock exchange quotes, and now clients, including our Ukrainian factories, are ready to pay abnormally high prices in order to continue working, maintain production, and be present in stores,” the expert said. “Large manufacturers are accustomed to concluding import contracts in advance, and prices under these contracts were significantly lower: on average, the price of raw materials increased fourfold. This significant increase in price affected everyone.”
Today, the world's largest cocoa factories are on the verge of closure due to a shortage of beans . As Reuters reported in mid-March, Africa's main cocoa producers in Ivory Coast and Ghana have reduced or even stopped processing because they can't afford to buy beans. So, most likely, chocolate prices around the world will soon increase sharply.
In July 2023, manufacturers were already raising prices, as cocoa beans were trading at ten-year highs. Then cocoa prices jumped by a quarter amid widespread flooding in key growing regions. In particular, in Cote d'Ivoire, which accounts for more than 40% of global cocoa production, there were very wet conditions that caused tree rot and disease.
It became known earlier that prices could rise around the world bananas because of the climate crisis. Read more about this in news.
