(3 Minutes Read)
Cocoa prices on the New York commodities market reached a new all-time high of USD 5,874 a ton on Thursday. Global cocoa prices have hit a fresh record high as dry weather hurts crops in West Africa. The cost of cocoa has now roughly doubled since the start of last year.
Soaring cocoa prices are already filtering through to consumers and squeezing major chocolate makers. One of the world’s biggest chocolate manufacturers Hershey warned: “Historic cocoa prices are expected to limit earnings growth this year. Hershey can’t talk about future pricing, given where cocoa prices are, the company will be using every tool in its toolbox, including pricing, as a way to manage the business, stated Michele Buck, chief executive of Hershey. These comments came as Hershey announced its financial results for the three months to 31 December. The figures showed sales fell by 6.6% as inflation-hit consumers cut back spending on confectionery.
Last month, Mondelez, the company behind the Cadbury brand, identified rising costs of ingredients as one of the challenges it faced in the year ahead. Chief financial officer Luca Zaramella said the firm had seen “significant increases in both cocoa and sugar”.
In December, the UK consumer group Which? said the price of some festive chocolate boxes had risen by at least 50% in a year. While overall inflation for UK supermarket food and drink eased in November to 8.3%, the rise in chocolate prices was significantly higher at 15.3%.
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https://trendsnafrica.com/cocoa-cultivation-in-tanzania-picks-up/
Cocoa prices have been driven up by poor harvests in West Africa, which produces the bulk of global supply. The El Niño weather phenomenon has been causing drier weather in Ghana and Ivory Coast, which are the world’s two biggest producers of cocoa beans. Hotter temperatures and shifts in rainfall patterns caused by climate change can also have an impact on harvests. Traders are worried about another short production year and these feelings have been enhanced by El Niño which is threatening West African crops with hot and dry weather.
