Skyrocketing Cocoa Prices Affect Global Markets

The price of cocoa is soaring to unprecedented levels. On Tuesday, the commodity’s price on the New York exchange exceeded a record-breaking $10,000 per ton, showing more than a two-fold increase since the beginning of the year. This extraordinary increase in cocoa prices is due to a restriction in supply resulting from poor harvests in key areas.

On Tuesday morning, the price of a ton of cocoa for delivery in May rose by 3.9% to $10,030, equivalent to over 233,000 Czech koruna. This marks the first time this commodity has broken the $10,000 barrier. Remarkably, at the beginning of the year, the price was “only” $4,200, which was already significantly higher than the roughly $2,500 at the end of 2022.

West African countries, which account for up to three-quarters of global production, are to blame for the poor harvest. According to Bloomberg, for the third consecutive year, there is a threat that local growers will end the year with a cocoa bean supply deficit.

Attention is now turning to the mid-season harvest, which is smaller than the main one at the end of the season. Ivory Coast, the largest grower’s regulator, expects a reduction in production. This is due to higher-than-usual temperatures in the country, resulting in cocoa pods not ripening sufficiently due to drought. The crop is also being ravaged by viral diseases affecting cocoa trees.

The global shortage of raw materials is shaking the entire market, as it comes at a time when demand for chocolate remains strong. Although chocolate producers have been well-stocked for a long time, it’s only a matter of time before expensive cocoa fully affects the price of chocolate in stores.