Cacao rates historically increase
Date
2/20/2024 5:17:28 AM
(MENAFN) The global price of cocoa beans has surged to an all-time high, exceeding USD6,000 per metric ton in intraday trading on the Intercontinental Exchange (ICE) in New York. This significant spike, witnessed on Friday, is attributed to exceptionally low harvests resulting from droughts in West Africa, a region responsible for the majority of the world's cocoa supply. Although prices later eased to around $5,880 per ton, they remain well above the previous record set in 1977, marking a doubling since the beginning of last year.
Cote d'Ivoire and Ghana, two West African countries that together produce two-thirds of the world's cocoa beans, are grappling with poor crops due to extreme weather changes and cocoa pod diseases. Shipments from Cote d'Ivoire have experienced a drastic decline of approximately 39 percent compared to the previous year, amounting to 1.04 million metric tons from October 2023 to February 2024. Similarly, Ghana's cocoa exports plunged by around 35 percent to 341,000 metric tons from September 2023 to January 2024, as reported by Euronews.
A cocoa poll by Reuters last week projected a global cocoa bean deficit of 375,000 tons in the current agricultural season. Industry analysts emphasize that the rise in bean costs is likely to persist due to the ongoing threat to global supply posed by the weather phenomenon El Niño.
This phenomenon, responsible for droughts in West Africa during the third quarter of 2023, is expected to persist at least until April, further impacting cocoa production.
The unprecedented surge in cocoa prices raises concerns about the potential implications for the chocolate industry and highlights the vulnerability of global supply chains to climate-related challenges. As the shortage intensifies, stakeholders in the cocoa industry may face increased pressure to navigate these challenges, from addressing supply chain disruptions to exploring sustainable farming practices that enhance resilience in the face of climate uncertainties.
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