Cocoa Prices Push Near Record Levels As Global Shortage Continues to Impact Market

By Thea Felicity

Apr 11, 2024 10:55 AM EDT

Cocoa pods are seen on a tree in a cocoa plantation near Sinfra in the Central region in Ivory Coast on October 12, 2019. - The purchase price of cocoa to the farmers of Ivory Coast, the world's largest producer, was set at 825 CFA francs (1.25 euros) per kilogram, at the opening on Tuesday of the cocoa year 2019-2020, ie up 10%, announced the Coffee Cocoa Council (CCC).
(Photo : ISSOUF SANOGO/AFP via Getty Images)

Cocoa prices continued their upward trend for a fifth consecutive day as concerns over tightening supplies drove prices toward record levels. 

According to Bloomberg BNN, the primary contract in New York saw a notable increase of up to 2.9%, mirrored by similar jumps in London. Dry conditions across West Africa are posing a threat to the ongoing mid-crop harvest, as reported earlier by VCPost.

The global cocoa shortage has propelled futures above $10,000 per ton, marking a doubling of prices since the beginning of the year and reaching record highs earlier this month. While this surge pressures some traders, it's prompting growers to re-enter the market.

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

How Countries Producing Cocoa Seek To Solve The Shortage

Ghana, a major cocoa producer, has initiated discussions with traders to postpone deliveries due to insufficient bean supply. The country has struggled to meet its contractual obligations in recent seasons due to reduced output, necessitating the rollover of deliveries and exacerbating strain on the global market.

Additionally, Ivory Coast has appealed to buyers to hold off until the mid-crop harvest to alleviate scarcity concerns.

If the shortage of cocoa bean supply persists, countries that are cocoa suppliers could face major challenges. Economically, they heavily rely on cocoa exports, and a prolonged shortage may lead to reduced export earnings, impacting government revenues and farmers' livelihoods. 

On a global scale, cocoa markets may experience volatility, affecting chocolate manufacturers and consumers worldwide. Governments may need to intervene with policies to support farmers and ensure supply stability.

READ MORE: Planet A Foods Raises $15.4 Million Funding to Expand Global Presence of Its Cocoa-Free Chocolate Brand

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