The world is expecting another and third global shortage of Cocoa beans in a row, the costs of which have already reached a multi-year high. Accordingly, chocolate will also become more expensive.
Cocoa bean prices have risen about 47% over the past year on fears that bad weather and disease outbreaks will hit crops in Ivory Coast and Ghana, which supply two-thirds of the world's supply, writes Bloomberg.
Analysts surveyed by the agency expect a global shortage of cocoa beans due to the El Niño weather phenomenon.
Therefore, inflation in the chocolate products market could continue even with a general easing of food price pressures. Leading manufacturers such as Hershey Co. and Lindt & Spruengli AG have already warned that prices for their products could continue to rise. Market participants fear that the price increase will reduce demand in both Europe and Asia.
In mid-September, the cost of New York cocoa bean futures reached its highest level in 12 years and then declined slightly. The price increase was triggered by heavy rains, pest infestations and plant disease outbreaks in West Africa.
The harvest in Ivory Coast in the new season (which lasts from October to March) could be 20% lower than last year, according to the agency's interlocutors. The trader Marex forecasts a global cocoa deficit of 279.000 tons - more than in the previous two seasonsusamm.
Market density affects the entire supply chain. Cocoa factories around the world have slowed down the processing of the beans into products for the confectionery industry.
“Chocolate is a luxury good and therefore does not always follow an elastic correlation between price and demand,” said Darren Stetzel, vice president of commodities in Asia at broker StoneX. “But higher prices ultimately mean fewer consumers,” he added.
It was previously reported that rising cocoa bean prices are also prompting new regulations in the EU that mean the products cannot be grown in deforested areas.
Source: Ukragroconsult (Ukraine)