Global Cocoa Prices Hit Record Highs
Record Highs for Cocoa Prices
Global cocoa prices soared to fresh record highs, driven by a continuous scramble for supplies. Traders are anticipating wider deficits this season and growing concerns for the next.
Impact on Retail Shelves
The surge in cocoa prices is now affecting retail shelves, with Hershey expecting a slowdown in demand for its products as consumers become more cash conscious. Sales volumes for the chocolate giant slid by 6.6% in the fourth quarter, leading to expectations of limited earnings growth.
Market Analysis
Market experts are predicting a potential squeeze situation in the cocoa market. The current damage to the cocoa crop from strong Harmattan winds in West Africa’s top producing region is contributing to the ongoing scarcity.
Price Surge
Benchmark futures for cocoa hit a record 4,670 pounds a metric ton at the ICE exchange, marking a 7.3% increase in a single day. Prices have nearly doubled since the start of last year, reaching unprecedented levels.
Supply Deficit
Exporters and pod counters in Ghana forecast a significant drop in cocoa output for the current season, further fueling concerns about a supply deficit. A global deficit of 375,000 tons is expected for the 2023/24 season, indicating a third successive supply deficit for the market.
Industry Speculation
Traders fear that the shortage will extend into the next year, potentially leading to a shortfall in supply. The possibility of a poor crop next season adds to the uncertainty surrounding future cocoa production.
Other Soft Commodities
- Raw sugar rose by 0.4% to 23.98 cents per lb.
- White sugar gained 1.4% to $665.70 a ton.
- Arabica coffee fell by 1.1% to $1.8585 per lb.
- Robusta coffee lost 0.2% to $3,109 a ton.
