Cocoa Prices Surge After Supply Shortage Due to Dry Weather in West Africa

By Thea Felicity

Apr 02, 2024 11:37 AM EDT

Sorting of cocoa beans according to their size and appearance is done in the workshops of Makaya Chocolat on December 23, 2020 in Petionville, Haiti. Although small in the face of South America's giants, Haiti is slowly developing its cocoa industry to ensure better incomes for thousands of modest farmers and to end the stereotype of gastronomic art known as the domain of wealthy countries.
(Photo : Photo by VALERIE BAERISWYL/AFP via Getty Images)

Cocoa prices have surged to unprecedented levels due to dry weather conditions in West Africa, which in turn worsened concerns about a supply shortage, according to BNN Bloomberg.

Although some rain has been recorded in cocoa-producing areas of West Africa, it has not been sufficient to address the dry conditions impacting cocoa crops.

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Cocoa Price Surge and Shortage

Maxar, a forecasting agency, highlighted the persistent difficulties faced by cocoa farmers due to insufficient moisture levels. To counter possible challenges, some African cities, like the Ivory Coast, have begun their mid-crop harvest, with forecasts predicting a decline of at least 17% compared to the previous season.

In response to the supply concerns, cocoa futures on the New York market experienced a notable uptick, surging by up to 2% on Tuesday to reach an unprecedented $10,324 per ton. This surge reflects the market's growing apprehension over cocoa supply shortages, which have intensified throughout the year, doubling prices since the beginning.

This year has seen cocoa prices go upwards, with an earlier report from VCPost detailing how they overtook Bitcoin in value. As a result, chocolate companies are expected to impose higher prices on customers.

Affected companies have yet to prove a statement on cocoa prices.

READ MORE: Cocoa Overtakes Bitcoin in Value: What's the Implication for Chocolate Companies?

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