Supply shortage pushes cocoa prices to record high

Cocoa prices on the world market have increased dramatically in recent trading sessions, surpassing the 10,000 USD/ton mark for the first time in history on March 26.

Experts predict that consumers will soon feel this price increase, in the context of the world facing the most serious cocoa supply shortage in decades.

Cocoa futures for May delivery on the ICE Futures Exchange in the US ended the session up 3.9%, reaching a record $10,030/tonne. Since the beginning of the year, the price of this commodity has increased by nearly 138%.

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Soaring cocoa prices have raised concerns about a knock-on effect that could push up chocolate prices, as major economies around the world struggle with inflation.

The world is facing its worst cocoa supply shortage in more than 60 years, and consumers could start to see the direct impact later this year or early 2025. The International Cocoa Organization forecasts a 374,000-tonne shortfall in the 2023-24 season, 405% larger than the 74,000-tonne deficit last season.

According to CNBC, cocoa prices have skyrocketed more than 200% in the past three months from $4,280 a ton in December 2023 and more than tripled compared to the same period in 2023, when the price of this item was $2,902 a ton.

Experts say the spike in prices is due to crop failures in West Africa, where the two largest cocoa-producing countries, Ivory Coast and Ghana, have struggled with severe climate change and disease for months.

The supply disruptions are most evident in the major producing countries of Ivory Coast and Ghana, which together account for about 60% of global cocoa production.

Heavy rains and the spread of black spot disease on cocoa pods in the two countries have affected cocoa production, according to a report by the International Cocoa Organization (ICCO) late last year.

The Vietnam Commodity Exchange said that severe supply shortages in major producing countries continue to push up cocoa prices. According to the Ivory Coast government, from the beginning of the crop to March 24, the amount of cocoa transported to ports in the country has decreased by 28% compared to the same period last season, reaching 1.28 million tons. Along with that, Ivory Coast's cocoa output in the 2023-2024 crop year is estimated to decrease by 21.5%, to 1.75 million tons.

Cocoa prices have already started to rise in 2023 due to a global supply shortage. The market is expected to increase further in 2024 as bad weather in West Africa - the world's largest cocoa growing region - causes shortages and puts pressure on prices.

Rising cocoa prices are also affecting the output of confectionery manufacturers. Recently, Swiss food and beverage giant Nestle announced that its sales in 2023 would decline after the company decided to increase the cost of its products by 7.5% due to the increase in the cost of raw materials, including cocoa.

Source: https://congthuong.vn/thieu-hut-nguon-cung-day-gia-ca-cao-tang-ky-luc-311169.html