Workers collect dry cocoa beans in front of the store of a cocoa cooperative in Hermankono village on November 14, 2023.
Sia Kambou | Afp | Getty Images
Cocoa prices hit a record on Tuesday as supply shortages push up fuel prices.
Futures for delivery in May rose 3.9% to $10,030 a tonne, marking the first time the commodity broke the $10,000 mark. Cocoa has soared this year, rising nearly 138%.
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Huge gains for cocoa in 2024
Difficult weather conditions and disease have affected production in West Africa, where about 70% of the world’s cocoa is produced. The two largest producers, Ivory Coast and Ghana, have recently been hit by a combination of heavy rain, dry heat and disease.
A November report from the International Cocoa Organization said heavy rains and the spread of black pod disease affected agriculture in both countries late last year. Poor road conditions also made it difficult to get available beans to the port, according to the report.
“With these two leading producing countries supplying about two-thirds of the world’s cocoa beans, any change in their production tends to have a significant impact on the cocoa market,” the ICCO said.
According to a February ICCO report, arrivals at ports in Ivory Coast and Ghana have fallen by 28% and 35%, respectively, since the start of the season compared to the same period last year.
Hershey has forecast flat profit growth for the year due to rising cocoa prices. The company reported fourth-quarter net income of $349 million, down about 12% compared to the same period last year.
“When we look at these record cocoa prices, it’s certainly a dynamic market and that’s challenging, but we’ve seen market volatility and fluctuations in input costs before,” Hershey CEO Michele Buck told CNBC in February.
“We have a good hedging strategy and have really good price transparency for these inputs through 2024,” she said.
Correction: Cocoa prices are up more than 100% this year. An earlier version stated the move incorrectly.
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2024-03-26 15:45:52
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