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Cocoa Prices Nears $9,000 Per Metric Ton – Fresh Record

Cocoa Prices Nears $9,000 Per Metric Ton - Fresh Record | GlobalCurrent24.com

According to Bloomberg and CNBC reports, cocoa prices nears $9000 per metric ton. This is as a result of low supply and high demand.

Beginning of this year, prices of cocoa have doubled compared to previous years. As of now, cocoa prices nears $9000 per metric ton. At the beginning of 2024, cocoa prices per ton were below $4,200.

The main reason for this high surge in price can be as a result of supply and demand. Aside supply and demand, cocoa swollen shoot virus is a factor for the low supply of cocoa resulting in the surge of its prices. The low supply from these factors mentioned has resulted in high demand in countries like the US. This situation is helping Mondelez and Hershey’s company to spike the prices for consumers due to the low supply of the resource.

Also, dry weather conditions are a factor for the spike in low supply of the cocoa. Ivory Coast, the leading producer of Cocoa in the world, is currently facing intense hotter temperatures same as Ghana. Normally, rainy season in the Ivory Coast begins from April to October. The situation of hot temperatures in the Ivory Coast has resulted in less or no rainfall in the regions, limiting the supply of cocoa across the globe.

According to the Founder and CEO of KKM Financial, Jeff Kilburg, the rise of cocoa prices was as a result of the supply issues encountered in West Africa.

“The speculative part of cocoa has the greater ability to overestimate prices. And I clearly think that overestimating is currently paying the price for the surge in prices of the cocoa,” Jeff Kilburg told CNBC in an interview.

Jeff Kilburg again added that he sees no end to the high rise in cocoa prices. He emphatically added that, he wouldn’t be surprised if the prices of cocoa shoots above 50% in the coming weeks.

Normally, supply and demand affects the prices of cocoa which happens almost all the time, but this year is totally different due to the intense hotter temperatures in the two dominant countries in the supply of cocoa; Ivory Coast and Ghana.

The low supply of cocoa has resulted into a market of uncertainty, with the quick increase in prices per metric ton. In London and New York, the prices of cocoa over the last year to the third week of March 2024, have increased by a whooping 166% and 189%. This was revealed by Gerard Stapleton, an analyst at the Global Data Agribusiness.

The estimated net output for the 2023/24 season, globally, is 4.5 million tonnes, a high reduction of around 340,000 metric tonnes. With this. Stapleton tags it to be a “significant shortfall”.

Ivory Coast produces around 40% of cocoa for the globe, while Ghana produces 15%. With the current conditions, supplies from these two nations are expected to reduce significantly by an 18% and 19%.

According to Sukanya Nag, a food technologist, at Future Bridge disclosed in an interview with Just Food that, there are many factors that affect the world of cocoa, to begin with poor weather. She again added that crop diseases also contributes to the yield of the crop.