Unfavorable weather in West Africa drives cocoa prices to unprecedented highs, chocolate costs to surge
In March, futures contracts for cocoa escalated to nearly $6,000 per short ton. Since the beginning of the year, there has been a significant price hike exceeding 43 percent.
6:15 PM EST, February 10, 2024
The primary cause of this surge is poor weather conditions in West Africa. This region is responsible for three-quarters of the world's cocoa production, as noted by CNBC. The El Niño weather phenomenon is to blame, as it has led to dry weather in Ghana and the Ivory Coast, which are the two largest producers of cocoa beans.
Furthermore, tree diseases have emerged as a serious threat, more than they have been in previous years. These are combated by cutting and replanting trees, a process that further complicates the harvesting procedure.
Predicting the increase in chocolate prices
Experts who collaborated with Reuters predict that in the 2023-2024 season the global shortage of cocoa beans will escalate to 413,000 short tons - this is over twice the amount predicted in August.
The growing cost of raw materials is expected to impact consumers, in particular, chocolate lovers. Manufacturers have nearly depleted supplies of low-cost beans. The American company, The Hershey Company, projects potentially lower profits and does not dismiss the possibility of price hikes. Russian companies, in contrast, anticipate a 15-20 percent increase in chocolate prices by 2024.
