Cocoa prices on the New York commodities market hit a new all-time high of $5,874 a ton on Thursday, February 8, as dry weather wreaks havoc on crops in West Africa. This is reported by the BBC.
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Cocoa prices have risen due to low harvests in West Africa, which accounts for the bulk of the world's supply. The El Niño weather phenomenon has resulted in drier weather in Ghana and Ivory Coast, two of the world's largest producers of cocoa beans.
It is noted that high temperatures and changes in precipitation patterns, caused by climate change may also affect the harvest.
Since the beginning of last year, the cost of the main ingredient for making chocolate has roughly doubled. Soaring cocoa prices are putting pressure on major chocolate producers.
On Thursday, one of the world's largest chocolate makers, Hershey, warned: “Historic cocoa prices are expected to limit earnings growth this year.”
Hershey CEO Michele Buck also did not rule out raising prices for customers.
“We cannot talk about future pricing. Given what the price of cocoa is, we will use all the tools in our toolbox, including pricing, as a way to manage the business,” she said during a call with analysts.
Last month, the US company Mondelez identified growth the cost of chocolate ingredients as one of the problems that will be faced in the future.
The El Niño phenomenon consists of a sharp increase in temperature (by 5−9 degrees) of the surface layer of water in the eastern Pacific Ocean (in the tropical and central parts) over an area of about 10 million square kilometers.